Generation Financial Services offers advice in London and across the UK on the most suitable pension income option for you.
Income drawdown pensions are a method of withdrawing benefits from your pension fund without the need to purchase a lifetime annuity. This plan is aimed at the more financially aware investor and tends to attract the larger pension funds. The minimum amount that can be invested varies from company to company and benefits are currently available from age 55 onwards. A drawdown pension may also be available for Protected Rights benefits.
You can defer taking your pension in the form of an annuity and instead make withdrawals directly from the pension fund.
Aims of drawdown pensions:
- Deferral of annuity purchase, thus avoiding being locked into low annuity rates that may apply at the time of retirement.
- Enables the policyholder to buy an annuity when it suits them and when annuity rates are more favourable. It also provides an opportunity to avoid purchasing an annuity altogether, where appropriate.
- Enables investors to retain control over their pension investments and allows them to continue to be invested in the markets.
- Postpones the decision of which type of annuity to lock into.
- Income can be varied within allowable limits, which gives flexibility. This can be useful for tax planning or where other sources of income are available.
- Enables any remaining pension fund on death to be paid to beneficiaries as a lump sum amount (a tax charge will apply) or to a charity free of tax.
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