The INFORMED Overview

A drawdown pension allows you to take income directly from your pension fund. You can choose how much pension you want to be paid each year within certain limits.

income drawdown – The Key Benefits

  • Draw down income from your pension
  • Two main options – fully flexible or a capped sum
  • Needs consideration between capital growth and income taken

Drawdown Income Types

Depending on your specific needs and circumstance a pension can be arranged to drawdown income.

There are two forms of drawdown pension:

Capped drawdown pension

The maximum amount you can draw each year is set but there is no minimum. This annual limit is calculated based on the value of the pension fund and factors set by the Government Actuary’s Department.

For those under 75 the  pension scheme must be reviewed with the annual limit at least once every three years. Other events can trigger a review of the limit. Over the age of  75 the scheme must reviewed  every year.

If  more than the limit is drawn in a year then the excess will be subject to a tax charge. These reviews pension payment amounts can go down as well as up.

Flexible drawdown pension

To qualify for flexible drawdown you must already be getting a pension of at least £20,000 a year from ‘secure pensions’ which can include  State Pension and  pensions paid from defined benefits schemes. With flexible drawdown there’s no limit on the amount you can draw from your pension scheme in any year. Which means you can leave it untouched or take the whole amount in one payment of just part of it as you need it.

The balance between income and capital needs careful consideration… but pensions can be arranged to suit your needs.
Of course our first meeting leaves you with no obligation or cost. We look forward to helping you to become informed.

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Simply call 01628 638822 or just use the reply email.

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