Choose Pension Drawdown and Get Multiple Benefits

Pension drawdown or income drawdown is a type of pension withdrawal in which you withdraw a part of your pension amount from your pension account, while the remaining amount remains invested so that it could increase with time. Income drawdown is a very good alternative of purchasing annuity. Following are some benefits that you will get by choosing the pension drawdown option:

• The nominee or dependent of the pensioner can get the complete residual fund in the pensioner’s account, which is not the case with most of the retirement schemes.
• The annuity purchase option remains open with pension drawdown. You may purchase annuity when you find the rates favorable.
• The transferring of your funds to income drawdown immediately makes you entitle to a 25% tax-exempted withdrawal from your pension account; later withdrawals can be made up to a maximum annual limit set by the Government Actuaries Department (GAD).
• This concept gives you extended control over your retirement income; you may determine when you would like to receive your retirement income and in what manner.
• You can get funds for an early retirement through income drawdown. This amount is exempted from tax and could be used to invest in any future project.
• This option also provides you with enough money to meet unanticipated expenses in future.

Pension drawdown facility is available till the age of 75 only; after this age the drawdown scheme is generally terminated and the outstanding funds are transferred to Alternative Secured Pension (ASP).

You may get more information about pension drawdown as well as other associated topics like QROPS, Alternative Secured Pension (ASP), Phased Retirement.