Pension drawdown is a way of using your pension pot to provide you with a regular retirement income by reinvesting it in funds specifically designed and managed for this purpose. The income you get will vary depending on the fund’s performance. It isn’t guaranteed for life.
You can normally choose to take up to 25% (a quarter) of your pension pot as a tax-free lump sum. Some older pensions might let you take more than 25% so it’s worth checking with your pension provider.
You then move the rest into one or more funds within a Flexible Income Product that allow you to take an income at times to suit you. Some people use it to take a regular income. The income you receive might be adjusted periodically depending on the performance of your investments.
Pension drawdown –
introduced from April 2015, where there is no limit on how much
income you can choose to take from your drawdown funds.
There are lots of different reasons why people want to release money from their pension, not least of which could simply be that you are now retiring and want to access the money from your pension to help with daily living expenses.
For others, it could be about paying off debts, starting a business, travelling and many, many more reasons.
The one thing everyone does have in common is that they want to be able to benefit from a pension that allows them to have
Flexible Retirement Options,
Investment Freedom and to take advantage to
Improve Death Benefits.
