With UK pension changes taking effect from 6 April 2027, the biggest impact is the change to the Inheritance Tax (IHT) treatment of unused pension funds. Current government guidance states that most unused pension funds and pension death benefits will be brought into the deceased's estate for IHT purposes from that date.
Voyant has added functionality to allow advisers to maximise pension withdrawals in a strategic way ensuring the income needs are staying within their basic rate tax band.
The dropdown type called “Maximum Within Basic/ Intermediate Tax Band”, in Planned Withdrawals gives users a way to model a strategy that withdraws the maximum amount from the selected pension while staying within the Basic (UK - 20%) or Intermediate (Scottish - 21%) tax band.
Next, change the Pension Strategy from the Default option > Flexi to UFPLS. A message pops up as a reminder.
Select Recurring > No for a one off Planned Withdrawal and then select Timing to chose the event for the withdrawal.
Or select Recurring > Yes and Timing for the start and ending of the withdrawals.
Click on Done to save the Planned Withdrawal.
To view the outputs go to Year View which can be accessed from the chart in Dashboard or Lets See.
Select Pensions to see the total withdrawal.
Click on the name of the pension to expand it and view the underlying details.
The total withdrawal of £67,027 is made up of a Taxable Lump Sum of £50,270 (the current Basic Rate ceiling for tax payers in England) with a Tax Free Lump Sum of £16,757.
The Tax Brackets used in the software can be seen in Year View > Taxes > Tax Summary > Income Tax Brackets for each year
e.g. England
e.g. Scotland.
For clients modelled as Country > Scotland the 21% tax rate ceiling is used
The full withdrawal amount also shows in Cash Flow.
What if there is surplus money from the Pension withdrawal
If you have Transfer all excess income to saving or Save excess income after retirement set to NO in your Plan Settings - Calculation Setting a Planned Withdrawal is treated in Voyant as habitual income therefore any surplus is treated as Surplus Income and assumed spent.
If it is not spent in reality you can set up a Transfer from All Surplus to save the surplus or reduce the Planned withdrawal amount by entering the figure manually.
If you see Surplus Income on the chart tool tip this indicates that the surplus is spent. Use the Year View - Investments tab to confirm.
If you have Transfer all excess income to saving or Save excess income after retirement set to YES in your Plan Settings - Calculation Settings the surplus will be assumed saved by default. It is saved to the Default Surplus Account from which you can set up sweeps to other accounts.
What if there is not enough money from the pension withdrawal
Where the total of the goals and expenses exceeds the Max within Basic/Intermediate Tax Band Planned Withdrawal the usual expense fulfilment conventions apply, which means that in certain circumstances/years 'as needed' withdrawals may also be taken from the pension in addition to the Planned Withdrawal.
Review your Liquidation Order in Plan Settings to see what order assets are used in the plan if needed.
Expense Fulfillment and the Liquidation Order UK
What about other taxable income
In most client plans there will be other taxable incomes e.g. state pension or DB (final salary pensions). Voyant will take this income into account and the reduce the Taxable Lump Sum from the uncrystallised pension.
For example, in England, with a State Pension of £12 547 in 2026, the Taxable Lump Sum will equate to £37 723 (£50 270 - £12 547) keeping the taxable income under the current basic/intermediate tax bracket.
Go to Year View - click on the Pension in the year of a withdrawal to see the Taxable Lump Sum.
Multiple Selected Accounts
Where a client has more than one uncrystallised pension, this pension can be added to the Selected Accounts list.
The Distribution Type (Each or Total) is not available when Max within Basic/Intermediate Tax Band is used.
The software will make the Planned Withdrawal from the first pension in the list until the balance is zero and then move immediately to the next pension in the list.
The spouse/ non legal partner's clients pension can also be added to the Selected Accounts list (see below).
When a spouse/ non legal partner's pension is added note that a withdrawal will be made from year 1, so money is taken from both the Primary and Partners pensions in the same year. It will use the basic rate tax band for both the Primary and Spouse in the same year.
Tip: Set up separate Planned Withdrawals for the primary and secondary clients if you would like to use the Basic rate tax band for the Primary client before moving onto the spouse.
The Max within Basic/Intermediate Tax Band option can also be used for Planned Withdrawals from Drawdown pensions. The withdrawal will be the basic/intermediate tax rate ceiling where there is no other income which is assessed for tax or the amount less the other income. When setting up the Planned Withdrawal from a Drawdown Pension the Flexi option doesn't show and therefore does not need to be amended.