Q. The Cash Flow shows a large 'spike' at client's age 75 - why is this?
A. When an individual reaches age 75, any pensions that are still uncrystallised at that point will be tested against their available LTA. This test is named BCE5B. If there is insufficient LTA, then the LTA charge of 25% will be levied on the excess.
Funds in drawdown have a second test at age 75. The value of the funds at age 75 is compared with the original amount that went into drawdown (after the payment of any tax-free lump sum). If the value at age 75 is higher, the difference between the two figures is what crystallises and is tested against the available LTA. This test is named BCE5A.
In the event that a charge arises under either BCE5A and/or BCE5B, this will be shown as an increase in the expense line, to represent the tax being paid via a withdrawal from the pension account(s).
Client plans created prior to 2018 are likely to include a default setting, in the Preferences screen, for the escalation of the LTA, allowing one to specify an assumed rate of escalation. More recent client plans do not contain this setting, and the LTA will increase automatically in line with your CPI assumption after any freezes in place by the government - more information here: Default Inflation / Growth Rates - Escalating the Lifetime Allowance (LTA)
To check your settings, one can go to Preferences > Plan Preferences > Default Inflation/Growth Rates, and look to the bottom of the list, to verify whether your client's plan retains the independent setting for 'Lifetime Allowance Escalation'.
Note that one can also see the LTA tax charge represented (in the Let's See screen) by selecting the 'Taxes' screen view (via the small 'dropdown', bottom left), and selecting the "Detailed" option. As such, of course, one can use this chart to show the benefit of an advice strategy you may be recommending, to eliminate or reduce the tax charge.