If you’re retiring before April 2015 and don’t want to buy an annuity before the new pension rules are in force, you have the option to take a drawdown of income.
Income drawdown allows you to draw an income from your pension pot while leaving it invested. You can continue to benefit from growth in your pension pot and can delay having to turn your pension pot into an annuity.
There are two kinds of income withdrawal:
- Capped drawdown where the amount you can take is now capped at 150% of the value of an equivalent annuity.
- flexible drawdown where there is no draw down limit but you must be able to show you are already receiving other pension income of at least £12,000 a year .
In both cases, any income you take from your pension is taxed in the same way as other retirement income.
To make sure that draw down is the right choice, we strongly advise that you seek professional advice from a fully qualified and regulated Independent Financial Advisor. To arrange for a no obligations, initial free telephone consultation click here.