Pension drawdown, income drawdown, income withdrawal, drawdown, pension fund withdrawal, are all different names for virtually the same product. It is a method of taking pension benefits without buying an annuity, (usually from age 55), and there is no requirement to buy an annuity at any age.
Pension drawdown - the basics
The basics of a pension drawdown contract are relatively simple. Just like an annuity, you can take the tax-free cash from the pension, but rather than buying a fixed income with the remaining funds, you just withdraw money from the contract.
There are now two types of drawdown; Capped drawdown and Flexible drawdown.
Capped drawdown - has restrictions on how much income can be withdrawn.
Flexible drawdown - no restrictions on how much can be withdrawn, but only available if you have guaranteed income of £20,000 per year. It is basically an uncapped version of drawdown allowing you to take out all of the money, subject to income tax (after taking the tax-free cash).
If you already have an unsecured pension or alternatively secured pension then it will automatically become Capped drawdown. Please note, death benefits have changed, and lump sum payments are now subject to a tax charge on death of 55%.
If you have a question about pension drawdown or want to discuss Flexible or Capped drawdown in more detail and how it can benefit you then Contact us online or phone 0800 011 2713 , or click on the links below to find out more:
If you can't find the information you're looking for on the website, or you want to know more or have a question, or just want to chat through some details about your pension then please feel free to contact us, without obligation. Either contact us online or call 0800 011 2713.