Income Drawdown advice

 

Income drawdown is an important retirement option worth considering, particularly for individuals who have pension capital of at least £75,000, invested in their pension funds.

Income drawdown plans were introduced following changes to Pension law in 1995. The changes removed the previous requirement to purchase an annuity at retirement. An income drawdown plan allows an income to be taken directly from the pension fund itself.

Income drawdown enhances the flexibility in that annuity purchase can be deferred until a time when it may be more suitable. Most of the major insurance companies now offer income drawdown plans.

These plans still allow up to 25% of the retirement fund to be taken as Tax Free Cash and no income needs to be taken unless required.

Income levels are determined by reference to annuity tables produced by the governments' actuarial department. The maximum income allowable is 120% of the highest level of income determined by the annuity tables, the minimum income which can be taken is nil. These limits allow further flexibility and so perhaps enable full retirement from a working life to be gradually phased in. These plans are categorised as 'unsecured' pension plans, eventually an annuity will need to be purchased, usually by the age of 75, although there is now a further option for individuals reaching the age of 75 years to consider - the purchase of an 'Alternatively secured pension' plan.

Income drawdown plans are relatively complex and are not suitable for everyone, but they can for some individuals offer a flexible approach to retirement. Careful consideration must be given to an individual’s personal circumstances, including the value of their existing pension/s. You should seek independent financial advice from a suitably qualified adviser.

To have an independent expert get in touch with you to offer initial advice, simply enter your details below.

 

Enquiry Type General Pension Advice Transfering a Pension SIPPS Pension Review Pension Release Pension Annuities Income Drawdown Company Pension Full Name:* E-mail Address:* Telephone Number:*: Postcode: Preferred Contact Time: Morning Afternoon Early Evening On submission of this form you agree to our privacy terms On pressing the send button you will be contacted by Sweetland Associates Ltd who will ask some relevant questions about your pension requirements.

 

 

 

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