We’re sure you’ve heard the term pension drawdown; this is where you leave your pension fund invested and take income as and when you need it, instead of using the cash to buy an annuity as people did traditionally. As the money remains invested, the pension fund can continue to grow, even when you’ve retired.
Since pension reforms, introduced in 2015, more retirees have opted to take this more flexible option with their pensions, and the Financial Conduct Authority has reported that drawdown has become much more popular, with twice as many people moving their funds into drawdown rather than an annuity.
From energy tariffs to mortgages, people who stick with the same pension provider year-in, year-out are at the greatest risk of losing out. The leading rates or most competitive prices are often reserved for those who compare the market, so the only way to cut your bills—or increase returns—is to look for a better deal. The same principle applies to saving for retirement: too many people have old or forgotten pensions that impose excessive charges or are made up of underperforming or otherwise unsuitable investments and assets. But there’s more to the pension problem than meets the eye, but carrying out pension checks can help your retirement income.