“I was very pleased with the straightforward advice received from Richard Bamforth when looking to consolidate a relatively small defined benefit pension into my main small self-administered scheme (SSAS). Most advisors either wanted to charge a huge amount for the government-required advice, or wouldn’t even deal with my enquiry since I wasn’t looking to use their managed funds. Richard was thorough in his investigation, and reviewed the options carefully, while taking into account my individual situation. I would recommend Richard Bamforth's services to anyone looking for expert, independent financial advice.”
One of the options for taking your pension is to leave some of the money you have saved and take part of it as income. This method is called income drawdown.
At Navigate Wealth, we can help you to decipher the options available to you relating to how you use your pensions savings. We will put your needs at the centre of everything we do.
To find out whether income drawdown is the best option for you, or to arrange a free consultation, contact the Navigate Wealth team on 0345 340 9690 or use our .
What is pension income drawdown?
Income drawdown involves taking money out of your pension to live off throughout your retirement. In order to do this, you have to be aged 55 or over and have a pension income drawdown to access your money using this method.
With income drawdown, you keep your pension savings invested when you reach retirement and take money out of your pension pot. Because your money stays invested, usually in the stock market, there is a risk that your fund may decrease in value.
A key advantage of pension income drawdown is that investment growth can provide higher returns, resulting in the rising value of your pension pot.
What are the rules surrounding pension drawdown?
Any income drawdown arrangements set up after 6th April 2015 are known as ‘flexi-access drawdown’. As part of this method, holders can take up to 25% of their pension savings tax-free upfront.
There are also no limits on the amount of income that can be withdrawn from the remaining balance. This means holders can:
- Withdraw all the savings in one go
- Take regular monthly or annual payments
- Take a series of lump-sum payments as and when they are needed
Those holders who took out pension drawdown before 6th April 2015 will have one of two types, capped or flexible.
This type of savings method is limited in how much you are permitted to withdraw from your pension pot, in line with rules established by the government. The maximum amount you are allowed to take is 150% of the amount you would have received each year if you had bought an annuity.
This allows holders to take as much as they require each year. In order to be eligible, you must have been receiving pension income of at least £12,000 from other sources.
Is pension drawdown the best option for you?
Income drawdown is a viable option and could be worth considering if:
- You want to be able to take sums of money out of your pension as you wish
- You want to continue to invest some of your money
- You want to take out different amounts every year
- You want to manage your annual tax liability
Navigate Wealth’s team of experts is available to advise you on whether pension income drawdown is the right option for you. We will assist you in making these important decisions about your financial future, and ensure you are well informed to make the right decision.
To find out more about pension income drawdown, or to arrange a free consultation, you can contact the Navigate Wealth team on 0345 340 9690 or use our .