Such companies are likely a front for fraudsters trying to get their hands on your hard-earned pension savings. Unless you’re absolutely certain you meet the criteria for ill health or early retirement it’s simply not possible. You decide how to take your pension, whether this is in a series of lump sums, income payments or a mixture of the two.ĭon’t be tempted by companies offering to ‘unlock’, ‘release’, ‘free’ or otherwise access your pension before the age of 55. It allows you to keep your pension pot invested throughout retirement and benefit from any potential future growth in the markets.įollowing the April 2015 pension freedoms, drawdown became officially known as flexi-access drawdown because it offers a more flexible way to access your pension. Pension drawdown is an alternative way of taking (or drawing down) your pension than an annuity. If you’re considering pension drawdown, the rules explained below should help clear up some of the most commonly asked drawdown questions clients have. However, the rules of income drawdown aren’t always as straightforward as that sounds, especially when it comes to how income drawdown is taxed when you take benefits. It allows you to take ad hoc lump sums and / or income from your invested pension pot as you see fit. Pension drawdown is a highly flexible way to take your pension whereby your pension remains invested. Whereas before there were caps and limits placed on who could use drawdown based on the size of their pension pot and their secure retirement income - and even then individuals were still required to buy an annuity at age 75 - all these rules have now been abolished. Accessing your pension via drawdown was made available to everyone, rather than just a select few. Following the introduction of the April 2015 pension freedoms, there was a huge shakeup to the rules of income drawdown.
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