Income drawdown

When you’re not ready to convert your pension fund into retirement income

If you decide that you’re not ready to convert your pension fund into retirement income by buying a lifetime annuity, but you do need funds, you have a few options. These are often known as income drawdown options.

Gender neutrality

Women could increase their pension income
by over 20 per cent

The new 20 per cent uplift in capped income withdrawals, applicable from the 26 March this year, means that people could start to see the benefit of this uplift from the start of their new income year following this date.

Retirement income guarantee

Additional income protection

If you have a partner or other dependants, such as children, you might want to think about additional retirement income protection. With income protection, your named dependants could get some or all of your retirement income if you die, either as regular payments over a period of time, or as a one-off lump sum.

Different types of annuity

Valuable options that allow you to tailor the income you need

In the UK, there are basically two types of annuity:
• pension annuities (compulsory purchase)
• purchased life annuities (voluntary purchase)

Buying your annuity

An important one-off decision that has long-term consequences if you get it wrong

If you save through a private personal pension, when you approach retirement age you’ll have to decide what to do with the pension fund you have built up. If applicable to you, one option is to buy an annuity. It’s important to find an annuity that suits you and provides the best deal because, after your property, an annuity is probably the biggest purchase you will ever make.