Pension Drawdown
We can help you understand your
Pension Drawdown Options.
You May Pay More Tax Than Needed If You take all your Pension At Once!
There Are Tax Efficient Ways To Access Your Pension
We Can Help!
We can help identify the most suitable
pension option for you
both
Annuities and Drawdown
Age 55 or over?
If you have a personal pension you could take as much as 25% as a tax free lump sum.
Guaranteed Drawdown
The basic rules are:
- You can normally take up to 25% tax free
- You can set your own level of income
- You decide how long you want to set the term of the policy
- You are provided with a Guaranteed Maturity Value that you will receive at the end of the term.
- You can provide full death benefits equivalent to the full value of the fund
- You can continue to invest up to £10,000 per annum in a pension and receive the appropriate tax benefits.
- As you are not locked into an annuity at the end of the term you can start another pension product including another drawdown pension or an annuity.
Typical Usage for Guaranteed Drawdown
This product can enable you to:
- Take your tax free cash and keep the remainder of you pension invested in safe investments accessing the remainder at a later date.
- Take your tax free cash and take an income that is potentially more or less than what you would take with a lifetime annuity. You can Access the remaining invested fund at a later date to either buy another pension product or just take the cash.
- Take your tax free cash and drawdown the balance of the fund in a tax efficient way. You could for example plan to run your fund out over a period of time greater than 4 years.
Points to consider:
Once you have agreed the basis of your fixed term annuity it is not normally possible to change. Some providers do allow these types of arrangements to be changed in the event of changes in health, marital status or death of a partner.
This product may not be suitable for you if you would like to:
- Buy a product that offers a Guaranteed Income for life now
- Change your income during the period of the Fixed Term Annuity.
- Try to improve your pension funds’ performance through different investment routes in the future.
- If one of the reasons you chose a drawdown product was to gain a better annuity rate in the future you may find that the annuity rates have fallen when you want to buy.
To understand the tax implication on death benefits click here
For more details go to our Fixed Term Annuity Page
