What is a Family Pension Trust (FPT) or Group Scheme

A Family Pension Trust (FPT) or Group Scheme is a flexible, trust-based pension arrangement that gives you greater control over how your retirement savings are managed and invested.

It combines the benefits of a personal pension with a trust structure, allowing individuals—and in some cases groups of people—to manage pension funds in a tax-efficient way.

How does an FPT or Group Scheme work?

An FPT or Group Scheme is set up under a trust:

• Your pension savings are held by a corporate trustee for the benefit of members
• A scheme administrator oversees the operation and ensures compliance with HMRC rules
• Members (often acting as trustees) can influence how funds are invested
• You can make your own investment decisions or appoint a financial adviser or investment manager

There are two main types:

• Family Pension Trust (FPT): An individual arrangement focused on your own pension
• Group Scheme: A shared structure where multiple members participate together

What makes a Group Scheme different?

A Group Scheme allows two or more members—such as family members, business partners, or company directors—to participate in the same pension arrangement.

This enables:

• Joint investment opportunities between members
• The ability to pool funds for larger investments, such as commercial property
• Shared oversight through a trustee structure

Each member still retains their own individual pension entitlement, even when investing alongside others.

Key features

Tax-efficient growth

Pension funds are typically invested in a tax-efficient environment, meaning growth is generally free from income tax and capital gains tax while invested.

Wide investment choice

You can invest in a broad range of permitted assets, including:

• Stocks and shares
• Funds and ETFs
• Commercial property
• Cash and other investments

All investments must comply with HMRC rules and scheme restrictions.

Control and flexibility

You have the flexibility to:

• Make your own investment decisions
• Work with a financial adviser
• Start, stop, or vary contributions

Retirement options

From age 55 (rising to 57 from April 2028), you can access your pension by:

• Taking tax-free cash
• Drawing a flexible income
• Purchasing an annuity

Death benefits

Your pension can be passed to nominated beneficiaries, helping support dependants or future generations.

The role of trustees

As the pension is held in trust, trustees play an important role. They must:

• Act in the best interests of members
• Ensure the scheme is correctly administered
• Review investments and maintain records

Members are often involved as trustees, particularly in Group Schemes, giving them a more active role in how the pension is run.

Important regulatory considerations

A Family Pension Trust or Group Scheme is a complex pension arrangement and may not be suitable for everyone.

• It is typically designed for individuals with larger pension funds and a long-term investment outlook
• Investment decisions are your responsibility and can affect the value of your pension
• The value of investments can go down as well as up, and you may get back less than you invest
• Pension rules, tax treatment, and legislation may change over time

Financial advice is important

It is strongly recommended that you seek regulated financial advice before:

• Setting up a Family Pension Trust or Group Scheme
• Transferring existing pensions into or out of the arrangement
• Making investment decisions or taking pension benefits

Some transactions may require advice as part of regulatory requirements to ensure decisions are made in your best interests.

Alltrust does not provide financial advice, so it’s important to speak to a suitably qualified and regulated financial adviser who can assess whether this type of pension is appropriate for your individual circumstances.

Is an FPT or Group Scheme right for you?

This type of pension may be suitable if you:

• Want greater control over your investments
• Have a larger pension pot
• Are comfortable making decisions or working with an adviser
• May benefit from investing alongside others, such as family or business partners

Because of its flexibility and complexity, it’s important to fully understand how it works before proceeding.

Summary

A Family Pension Trust or Group Scheme is a flexible and powerful pension solution that offers:

• Tax-efficient growth
• A wide range of investment options
• Control over how your pension is managed
• The ability to invest individually or as part of a group

However, it is not suitable for everyone. Taking professional financial advice is an important step in deciding whether this type of pension is right for you.