Income Drawdown offers the flexibility to adapt your pension to your lifestyle
There have been many changes to the legislation surrounding Income Drawdown over the years. The changes in April 2015 were widely reported on and brought complete freedom for those wishing to access their pension.
Here at Boolers we offer income drawdown services and advice to clients throughout Leicester, Loughborough, Stamford and all surrounding areas, our team will review your current situation and provide bespoke recommendations and suitable options.
The main features of Income Drawdown are:
- The ability to increase and decrease income levels through retirement.
- The flexibility to defer or completely avoid the purchase of annuities on retiring.
- The option to take a Tax Free Cash Lump Sum and defer taking an income.
- Greater control over your pension fund assets through retirement.
- Ability to pass your fund on to your loved ones in the event of death.
How income drawdown works
An income drawdown allows you to take up to 25% of your pension pot as a tax-free lump sum. The residual value of your pension can then provide you with pension income via income drawdown. The income you receive is not fixed at outset and may be increased or decreased depending on your requirements.
There are two main types of income drawdown product:
Capped Drawdown– continuing only for those who already used Capped Drawdown before 6 April 2015, Capped Drawdown allows you to withdraw pension income from your pension fund, but there is a limit on the amount of income you can take out each year
Flexi-access Drawdown– available from April 2015, Flexi-Access drawdown allows you to withdraw pension income at any level from your pension fund
Whilst the maximum tax free entitlement has been maintained at 25%, individuals can now access the remainder of their pension entirely via Flexi-access Drawdown if they choose. Having ultimate control over your pension is welcomed by most, however the potential for significant tax and investment risks must be considered.
Whether you are considering accessing pension benefits for the first time or reviewing an existing drawdown arrangement, the links below provide further technical insight. Alternatively contact us for bespoke income drawdown advice. we have many years in providing income drawdown services throughout Leicester and all surrounding areas.
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