Significant Merits of Income Drawdown

Income drawdown is also known with the name pension drawdown; it is basically a kind of pension withdrawal in which you take out a part of your pension amount, while the remaining amount remains in the account so that it could increase with time through interest. The pension drawdown option makes it possible for you to use partially or fully the savings in your pension fund once you decide to retire or semi-retire. Pension drawdown provides an alternative to purchasing an annuity. In it, your pension remains invested and you have to withdraw a portion of the pension pot each year as an income.

Following are some significant merits of income drawdown:

·         Income drawdown concept offers complete residual amount to the dependent or nominee; this option is unavailable in most of the retirement schemes.

·         The door to purchase annuity remains open; so you may proceed when the rates are favorable.

·         On transferring your fund to  pension drawdown plan, you become entitled to make an immediate withdrawal of 25% amount that is exempted from tax; later, you can take an income from the invested fund up to a maximum annual limit fixed by the Government Actuaries Department (GAD).

·         Income drawdown provides you with increased control over your retirement income; it allows you to determine when and how you would receive your retirement money.

·         Your fund remains invested with pension drawdown, when you don’t want to invest the money in taking an annuity.

To know more about Income Drawdown, along with other associated things like QROPS, Drawdown Rates, Alternative Secured Pension (ASP), Phased Retirement, etc., you may visit : Gerardassociates.co.uk