What is Pension Drawdown?
Pension Drawdown is the most flexible way to access your income and tax-free cash at retirement. It allows you to take up to 25% of your fund tax-free whilst leaving the remaining fund invested for future income payments.
You can select the level of income you need, and either take a one off lump sum or income in regular instalments. Pension Drawdown allows you to alter the income as and when you please. You can increase or decrease, start or stop income at any point.
The Pension fund can also be left to spouses, children or whoever you wish, without the 55% tax charge levied under the previous rules.
Unlike an annuity, the fund always stay under your control, giving you the flexibility and freedom to adapt your income to suit your changing situation throughout retirement.
If you decide at a later date that an annuity is more suitable, you can convert the remaining fund into a guaranteed lifetime income at any point. As your fund stays invested, it provides the opportunity for continued growth. There's an unlimited amount of investment options ranging from the very cautious to more adventurous solutions. You should be aware however, that pension drawdown is an investment and doesn't have guaranteed returns. The value of your investment can go down as well as up.
Who is the Best Drawdown Provider?
There are many companies offering an income drawdown facility. They all charge differently and there is no clear provider who offers 'the best' plan. The plan that's right for you depends on your fund size, how you want your funds to be invested and your confidence in the provider.
We have put this website together to bring together the main feature of the most popular pension drawdown providers. Use the pension drawdown calculator as a tool for your initial research to find out about pension drawdown charges, features and service. If you want further advice on which plan is best for you, we have qualified financial advisers here to assist, just fill out a contact form or give us a call.
Essential Reading for Self-Select Drawdown
February 20, 2019
If you’re looking at Do It Yourself (DIY) Drawdown, and are choosing to manage your drawdown plan yourself, there’s an overwhelming number of questions you need answering before choosing a provider. The LangCat has published an extremely detailed white paper covering the main providers and features they offer.
The main questions I get asked about Income Drawdown
February 12, 2019
When can I drawdown my pension? Anyone from the age of 55 can move their pension into drawdown. There are certain situations when you could access your pension earlier, say from 50, if your occupational scheme has a protected retirement age. You may also be able to access your pension earlier if you are in […]
New Rules to help retirees stop making poor decisions in income drawdown
February 12, 2019
The Financial Conduct Authority has launched a consultation to stop those entering retirement through income drawdown, make poor investment decisions. A problem has been identified where retirees are simply accepting their existing pension company’s drawdown product. Over 100,000 over 55’s per year are going into drawdown without seeking advice. The stats show that since the […]
I found the person I dealt with very helpful and Honest. He made the process of finding the right package a good experience rather than a chore. He kept me up to date on what was happening and I felt all along that I was treated as an individual rather than just another client and would not hesitate to recommend his services.
I needed an income that allowed me to have a substantial income straight away and to last as long as possible with a guaranteed income.
I do not like taking risks, especially with money, so the plan offered with a guaranteed income for a set period of time was exactly what I was looking for and your company was the only one that I spoke to offered this type of plan to me.
Proposals were put to me, after a review over the phone, on my original figures, and it did not take long to set everything up based on the increased value of my pensions.
Overall I am very pleased.
Suited my Requirements
Pension drawdown has grown in popularity since the new pension reforms were announced in the March 2014 budget. Providing unlimited access to your pension savings it offers the most flexibility with how an income is taken. There are no restrictions to the amount of income which can be withdrawn, however this is not a guaranteed lifetime income and therefore consideration should be taken before selecting this option.