Pension Drawdown
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What is a
pension drawdown?
Pension drawdown allows you to use your pension pot to receive a regular income in your retirement. You can take a tax-free cash lump sum from your pension up to 25%, and invest the remainder in your pension drawdown plan.
A pension drawdown is not guaranteed for life because your pot could either increase or decrease depending on the performance of the fund and how much income you draw.
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How it works
Start your quote journey
Simply click 'Get Started' to begin your Money Service search for the perfect drawdown plan for your specific circumstance.
Tell us what you need
Fill out some simple and straightforward details about your current situation, so that we can prepare your drawdown options.
View your best deals
We'll personalise the service to your individual needs and goals, to find the perfect drawdown plans for you.
Benefits and risks
It’s important to weigh up the pros and cons to a pension drawdown:
Benefits
-
Improved flexibility
You can withdraw what you want when you want. You might decide to withdraw more in the early years of retirement and reduce your income as your circumstances change. -
You're in control of your investment
The fund is invested and can continue to grow, and you get to decide the amount of risk you're prepared to take. -
Pass on your remaining funds
You have greater control over how the remaining pension fund is distributed to beneficiaries when you die, without an inheritance tax charge.
Risks
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Running out of money in retirement
Poor investment decisions could result in your pension fund dwindling rapidly and you could be tempted to take more than you need. -
You need to manage your investments
Unlike an annuity, you need to actively manage your investments, or pay someone to do it for you. Managing your investments can be difficult to understand and mistakes will have consequences. -
Investment risk
Your pension adviser will help you understand your attitude to risk. Markets and the value of the various types of investment you will hold in your pension fund may fluctuate regularly.
Why choose The Money Service?
Here are some of the ways our selected advisers can help:
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What support is available
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What customers say
Access to funds is brilliant
My pension fund is performing well and the flexibility and access to the funds is brilliant. Their customer service and advice have been excellent and I wholeheartedly recommend them.
Scott Hughes
Helped grow my funds
Their staff are professional, proactive, helpful in understanding my future plans and have clearly demonstrated their expertise by growing my funds whilst managing the changing market conditions.
Dennis Putman
Helped make the right choice
The advice I have received was very informative and helps me make choices which I wouldn't have a clue about on my own. There is always the opportunity to speak to a real person who answers any queries.
Victoria Moxom
Impressed by staff experience
I was very pleased with the standard of service and was impressed by the level of experience of your staff. They listened to what I had to say and gave good, appropriate advice.
Duncan Foster
Excellent from start to finish
Got the financial advice required to transfer my Defined benefits pension into a Flexible drawdown. Those who dealt with my case were very helpful, friendly and gave excellent service from start to finish.
Sarah Keeping
Pension grew faster and quicker
I wish I had been much longer with them. They gave good advice and my pension grew faster and quicker than my old stagnant providers. I'm very happy with their service.
Daniel McPherson
Answering your questions
Still unsure of a few things? We've got you covered with a few simple answers to some of our most frequently asked questions.
Pension drawdown allows you to use your pension pot to receive a regular income in your retirement. You can take a tax-free cash lump sum from your pension, of up to 25%, and the remainder will be invested in your pension drawdown plan.
For example, if you move £200,000 into drawdown, you can take up to £50,000 tax-free cash and the remaining £150,000 could be put towards a drawdown plan.
Your pot could either increase or decrease, depending on the performance of the fund, and how much income you draw and therefore isn’t guaranteed for life. So it’s vital that you get advice from a financial adviser who can regularly review your plan. To be eligible for drawdown, you need generally to be aged 55 or over and have a defined contribution pension.
A drawdown facility is highly flexible, and there are lots of plans from a variety of pension providers, so it’s important you get independent advice to discuss the right option for you. You can use your existing pension (if it provides a drawdown facility), move to a new plan, or move your pension to drawdown in stages.
The income you receive from your pension pot is not fixed and can be changed at any time. However, any income that you do take will be assessed for tax. Therefore, you’ll be able to review your drawdown facility as regularly as you need to.
The same way that a pension drawdown can offer flexibility to take income from your pension, it can also be flexible in who you decide should inherit it (your dependants).
How your pension drawdown is taxed depends largely on how old you are when you die. If you pass before the age of 75, the full value of your pension pot, at the date of your death, will be paid to your dependants as a tax-free lump sum or used to buy an income (provided your dependants access the funds within two years of your death). However, if you die after the age of 75, your pension pot could be subject to income tax when it’s passed on.
Get in touch
Call us today and a friendly drawdown consultant will be on hand to help. Or request a callback and a member of the team will get in touch at a time that suits you.