Pension Drawdown – Flexible Retirement Income
‘Drawdown’ refers to a common means of accessing your pension in such a way that you receive a regular income from it and reduce the sum gradually over time. Pension drawdown offers an alternative to buying an annuity, the pros and cons of each being important to consider.
In broad terms, if you are comfortable with the risk of keeping your pension funds invested, drawdown gives you more flexibility of when (after the age of 55) and how much income you can take. An initial conversion with one of our experienced advisers can help you understand whether an annuity, drawdown, or one of several other options could be right for you.
How Does Pension Drawdown Work?
With a pension drawdown you will have more control over your retirement income, as you decide how you wish to take your pension. You’re able to take an income from your pension when you require it, leaving your pension pot invested.
Why do our clients choose us?
- We’re a Chartered Firm, which means we’re held to exceptionally high standards of client outcomes.
- We’re part of the Quilter Financial Planning network, giving you access to some of the most valuable financial planning resources available.
- We’re a friendly team, who understand that your lifestyle, family and future are all part of the financial decisions you make.
Call us on 01952 279 379 or visit our contact page for more options.
The distinct features of pension drawdown
As with any arrangement, there are specific characteristics which must fit neatly with how you intend to manage your finances in retirement. Whilst it seems like there’s a great deal to consider, we’re experienced in navigating you through this and ensuring you’ve ticked all the boxes.
- Your money remains invested
- While this provides an opportunity for growth it also creates the risk of loss. For those who are comfortable with the risks and can afford to take them
- Greater flexibility
- Drawdown undoubtedly provides more flexibility in when and how much money you can take. However, you should be realistic about the likelihood that you will use that flexibility, and whether it is worth accepting the investment risk inherent in drawdown.
- Reduce tax
- The flexibility of when and how much to take can mean that you may be able to reduce your tax bill if you have other income or assets to rely on
- Death benefits
- If you die with funds remaining in your drawdown plan they can be inherited by your family members and loved ones which will also have the same flexibility when and how to take money from the plan.
