Pension Drawdown

Since 1995 it has been possible to take retirement benefits from your pension fund by way of an arrangement known as Pension Drawdown. Sometimes this is called Pension Withdrawal, Income Drawdown, Income Withdrawal or Pension Release.  You can take benefits from your pension funds, from age 50 onwards, without immediately buying an annuity.

From the time of taking benefits until you reach 75, you can use the income withdrawal and take both tax-free cash and an income directly from your pension fund.

The flexibility exists within the arrangement to take the maximum tax-free cash that is available. This could be for raising capital to start a business or for the deposit on property that you intend to let. The minimum income could then be taken if this is all that is needed.

The pension fund that remains can be invested in any investment fund that is offered by the provider of the arrangement. These can vary, for example, between areas offering consistent returns, such as property funds, or for the more adventurous investor, equities.

Some of the advantages of an income withdrawal are:

·         Flexibility to vary your income according to your requirements