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Income Drawdown

 

Pension Finder introduces you to Income Drawdown advisors with the appropriate level of technical pension knowledge.

Income Drawdown is technically more demanding and structurally very different from an annuity. We strongly recommend appointing a suitably qualified specialist pensions advisor to guide you through all of the planning issues that we will begin to touch on here.

 

 

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  Income Drawdown - more information

Income Drawdown gives more flexibility by leaving the retirement planning door wide open for more definitive decisions at a later date.

If you are approaching retirement and thinking about income drawdown, then it is vital that you and your advisor take as many factors as possible into account, including the following:

  • Death Benefits
  • Rules and Regulations
  • Alternatives
  • Providers
  • Income Requirements
  • Tax Free Cash
  • Inheritance Tax
  • Age
  • Investment Risk
  • Size of Pension Fun

Income Drawdown is a retirement planning option typically available to a person at normal retirement age (NRA) with a total combined pension fund value of over £100,000.

We are happy to introduce you to a suitable advisor if you complete our form today.

Income Drawdown Reviews and Administration:

The need for advice is very obvious when considering what happens next, after you have decided to initially use Income Drawdown as a financial product that supports your retirement planning.

Firstly, Income Drawdown needs to be reviewed and it is most definitely not a one time planning event that finishes when the transaction is completed. So choosing a supportive and reliable advisor that will be there to guide you through each and every review is vital.

Staying up to date with your chosen funds performance, investment fund values and the potential impact that it may be having on your varying income requirements can be confusing. A quality advisor is there to help you understand the financial impact and address these important technical matters.

Completing paperwork like tax returns and keeping up to date with the Income Drawdown rules and regulations can be stressful. Advisors with strong supportive administrative backup teams can help with every step of the process and are worth their weight in gold.

Your income and therefore your income tax calculations may vary depending on how you use your lump sum and subsequent income options. An advisor with strong links to tax practitioners and accountants will be able to plan and demonstrate the optimal strategy for you.

Take your Income Drawdown enquiry up a level and complete our form today.

Risk & Reward

Income Drawdown allows you to keep your options open for much longer and maintain maximum planning flexibility around income.

Mortality statistics are improving, people are living longer and so more pressure is being placed on their pension funds to provide income for significantly more years in retirement.

Inflation and rises in the cost of living can be problematic after all the cost of heating, lighting and food isn’t likely to start falling anytime soon. Trying to have your investment returns out-pace inflation often causes people to start blue sky thinking and taking on too much risk.

If you are seeking certainty about your income in retirement with minimum fuss then you may find your advisor steering your conversation in the direction of an annuity.

Steer yourself through the more challenging issues with a qualified Income Drawdown specialist, complete our form today.

 

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Income Drawdrown GAD & Splitting the Fund
March 2nd, 2011 | Income Drawdown

Split Between Drawdown Pension AnnuityThere is the possibility that the maximum amount of money you are allowed to draw as income will exceed the amount that can be withdrawn from a regular single life annuity. Government Actuary Department (GAD) tables are used to decide how much your maximum limit is. These tables calculate data including your age, and 15 year gilt yields to come up with a figure. Once the income limits are set, they cannot be changed until the next review.

In the event that you suffer from a serious illness or else you are a smoker, there is the chance that you can receive a higher maximum income level than that supplied by the GAD data. An individual’s lifestyle and health status are not factors taken into account by the GAD calculations.

As long as you remain within the maximum limit, you can withdraw any amount you wish as well as being able to choose when to withdraw. The plan will be reviewed every 5 years with some companies preferring shorter intervals. This review involves recalculating the maximum income level as there is the possibility that the data will be different.

Once each review has been completed, you will be informed about the new GAD limit which may increase or decrease since the last review. Those who transfer money from their pension fund to the drawdown fund or withdraw money to buy an annuity will automatically be subject to a review. There is also the option of asking for a review to take place each year on the anniversary of the plan. By doing this, you will restart the five year review process. Occasionally, a pension holder may be forced to withdraw money from their funds due to a divorce court order. If this happens, a review will also be automatically implemented.

Splitting Your Fund

This means you can place some of your pension fund in income drawdown and the rest in annuities. This gives you the best of both worlds. With the annuity, you have a certain level of guaranteed income which will ensure you can meet your financial responsibilities. You can then take the rest of the fund and attempt to increase it by putting it into a fund. This can serve as a supplement to the guaranteed income. Should your investments lose money, at least it will not be a devastating blow.

If you haven't found all the answers that you are looking for you can find similar content in the Income Drawdown sections, contact an adviser at the top of the page, or you could try these related posts:

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