srakastrategic.blogg.se - Drawdown on pension

All mentions of drawdown here therefore refer to flexi-access drawdown, unless stated otherwise.

Since this is now the only kind of drawdown that is available, it is usually referred to as just 'drawdown'. If you have a capped drawdown scheme in place, it lets you take up to 150% of the income you could have received from an annuity, for as long as your fund lasts.įlexi-access drawdown has no such cap, so you can take as much income as you like for as long as your fund lasts. The term 'flexi-access' was originally added to distinguish it from something called 'capped drawdown', which is no longer available except to people who set it up before April 2015. When people talk about 'drawdown' these days, they usually mean flexi-access drawdown. What is the difference between flexi-access drawdown and capped drawdown? You can take as much or as little as you like, within the limits of your pension pot – once your savings are gone, they’re gone. The withdrawals are classed as income (so are subject to tax). There are several ways to access this money, and drawdown is one of them.ĭrawdown allows you to make withdrawals of money from your pension pot. You can use the money in your pension pot(s) to support you in retirement. If these are defined contribution pensions (as opposed to defined benefit) then you will end up with one or more pension pots.

Over your career, you will hopefully have built up pension savings in either workplace pensions or private ones. Pension drawdown is a way to take a flexible income from your pension savings.

Frequently asked questions about drawdown.

What are the disadvantages of drawdown?.

You can find out more about the differences between drawdowns and annuities here. However, pension drawdown rules allow for a more flexible – if riskier – form of income. In the past, most people used their pot to buy an annuity (a guaranteed income for life) and this remains a popular option. If you have a defined contribution pension, there are a number of ways in which you can use it to fund your retirement.