The 2nd Benefit Crystallisation Event (BCE) provides an indication for a client who crystallises benefits into Drawdown, how much of the Standard Lifetime Allowance will be available/used when the growth of these benefits are measured at the 2nd Benefit Crystallisation Event.
When a client crystallises his benefits into Drawdown, this is a Benefit Crystallisation Event (BCE) and that amount will be measured against the Standard Lifetime Allowance (SLA)
When the client attains age 75 (or when fund to purchase an annuity, if earlier), this would also be a BCE. This is the 2nd BCE for those pension benefits.
It is the fund growth since the first BCE which is then measured against the SLA at that time.
For some clients, especially those approaching the SLA, to reduce any potential Lifetime Allowance Charge or maximise benefits paid to beneficiaries they may consider planning options such as crystallising benefits, take TFC and/or income, or do nothing. Of course this will depend on a number of factors such as income tax status of client, income tax status of beneficiary, net growth rate of fund etc.
To help with these planning considerations, we have included an ‘Options’ page which provides an indication of total benefits paid at the clients’ life expectancy age.