What is it?

It allows you to withdraw an income from your pension as well as take the tax free cash element, while keeping the funds invested for potential fund growth. You have the option of taking no income, or income to the maximum allowable which is specified by the provider’s calculation from the Government Actuary's Department. You can transfer in some or all of your pension plans.>

Advantages

• You delay in purchasing an annuity, thus maybe benefiting from better annuity rates due to an increase in age.
• You retain control of your investments and choose the amount of income you withdraw up within limits.
• You do not have to make a one-off decision.
• Potential for capital growth and increasing income.
• If you die whilst in income drawdown the remaining fund can be passed on to your heirs, less a 35% tax charge as a lump sum, or can be made available to provide an income for your dependants/spouse if under 75 years. This is usually greater than under the conventional annuity route.
• The level of income which may be drawn, is determined by the GAD. Income may be withdrawn up to the determined level, the individual will be able to plan in advance the level of income that they wish to take each year, thus enabling tax planning
• You may wish to have the Tax Free Cash and no income initially and phase the income in, in the future.

To see if this is suitable for your circumstance please complete our enquiry box to the right.