Address

Precise Investors

Saturday, March 6, 2021
Guides

A Guide to Income Drawdown

Income Drawdown

Introduction

New rules that give private and workplace pensions holders far greater freedom in how and when they access the cash value of their pension have introduced income drawdown as a popular alternative to traditional annuities.

An annuity is a guaranteed income for the rest of the holder’s life, bought in exchange for the value of a pension pot. Before the new rules, the vast majority of pension holders would buy an annuity on retirement, its size depending upon the value of the pot.

The annuities provider reinvests the value of the pension pot and hopes to generate enough cash flow from the investments to at least meet the annuity paid to the holder. On the annuity holder’s death, the payments are no longer due and the financial company that had provided the income is then takes all revenues generated from the investments as its own clear profit.

Topics covered in this Guide

  • Income Drawdown
  • Flexi-Access Drawdown
  • Combining Drawdown and Pension Contributions
  • Tax on Drawdown Income
  • Inheritance Rules
  • Initiating an Income Drawdown Plan
DOWNLOAD YOUR FREE GUIDE
Important:

The articles are for information purposes only and Precise Investors shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.

Precise Investors does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

Leave a Reply

20 − nineteen =