top 5 pension drawdown questions

Pension Drawdown – Top 5 questions you should ask your pension expert.

Since pension regulations changed in 2015 and pension freedoms were introduced, it has been possible to withdraw up to 25% of your pension pots as a tax-free lump sum plus giving you options to withdraw your funds when you need them, instead of the traditional route of an annuity which gives you an ongoing regular income.

Many people have found pension drawdown a very attractive option. Pension funds try to make pension drawdown easy to manage and allow people to take chunks of their funds when they please or need a capital sum for a purpose like paying off the mortgage.

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Shop around before you drawdown

Shop around before you drawdown: your current pension provider might not be your best option.

Once you approach retirement age, a key decision to make is how to make use of your pension income drawdown. However, your current pension provider may not be offering you the best drawdown deal – and this could be costing you money. Here are three key questions to consider, to help you decide whether your current pension provider is best for you.

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Annuities versus drawdown

Should I buy an annuity? Or is income drawdown the future?

Thanks to pension freedoms, there is now more flexibility than ever over how you are going to take your pension. Pension drawdown has become particularly popular in recent years, but there are still advantages to the more traditional pension annuity.

What are the differences between drawdown and annuity

Income drawdown is the newest option. Your defined contribution pension acts like any other investment as you pay into your private pension and – hopefully – see your investment grow. When you retire, you can withdraw money as and when you need it. The rest of it stays invested in your pension pot to potentially keep growing. A pension annuity, however, allows you to guarantee a regular income for the rest of your life or for a set period of time. The income is always there, and in most cases, you cannot change or cancel if you change your mind.

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How to avoid a pension drawdown disaster

How to avoid a drawdown disaster

Pension drawdown has become a highly popular option for those with a private pension. Thanks to pension freedom, this means that you have the option to withdraw money from your pension fund after the age of 55. The amount of retirement income, and how often, is up to you. There are some great advantages to this – the tax-free lump sum cash option is particularly popular – but this needs careful planning to avoid your money running out and a drawdown disaster.

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A guide to pension drawdown

A guide to pension drawdown

Many people are now choosing income drawdown as an option in their retirement planning. This is different to the traditional annuity which most people used to purchase – so here is a guide to pension drawdown, and how to work out whether it’s for you.

What is pension drawdown?

Put simply, income drawdown means your defined contribution (DC) pension is like a savings account. Whether or not you choose to claim your tax-free lump sum cash, you can withdraw money out of your DC pension whenever it’s required. The rest stays in your pension pot and means your investment can continue to grow.

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Pension Income Drawdown Explained

The benefits of income drawdown

As your retirement planning starts to take place, there are several options to think about to make sure you get the most from your pension savings. ‘Pension freedom’ now offers a range of choices, such as income drawdown. You may have heard about the 25% tax-free lump sum you could take out of your pension at age 55; you might even be enjoying it already! Since 2015, however, there have been extra options available for you when considering your next steps.

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