In a pension drawdown, you’ll be able to withdraw from your pension fund in whichever way you like. Either in lump sums or regular income. A common choice is to take more in the early years of retirement and less as you grow older (because we all need a bit of a treat to celebrate the end of working life). It’s important to note, however, that drawdowns only apply to those with defined contribution pensions. This means that final salary pension holders would have to transfer. And that comes with a lot of risks that need to be carefully contemplated.
If you decide to go through with a pension drawdown, there are a number of things you’ll need to consider. We’ll guide you through the process to make sure it’s as simple and stress-free as possible.
By choosing a drawdown, it’ll be your responsibility to make sure the fund lasts a lifetime (sounds daunting, we know). But, we’ll construct a plan to help minimise the risk and boost the investment growth of your pot..
Tackle the tax
At the initial point of drawdown, you’ll be able to take a tax-free sum of up to 25% the fund value. Any withdrawals taken after this will be taxed as income. To make sure you reap the benefits, we’ll help you figure out the most tax-efficient way to withdraw.
Unlike annuity pensions, drawdowns can be trickier to wrap your head around. Our advisors will make sure you understand every risk, rule and benefit inside out. Because with a bit of extra effort, you could get more for your money.
Protect your loved ones
After death, your beneficiaries are entitled to your remaining drawdown fund, which they’ll receive tax-free. This means your well-earned pot wouldn’t go to waste (unlike in an annuity pension, where the remaining fund is given to your pension provider). We know how important it is to protect our loved ones. So we’ll help you do just that.