Income Drawdown

Income drawdown is the most flexible way to take your pension benefits. If you’re not sure how and when you want to take your money in retirement, income drawdown could really work for you.

Why income drawdown?

• Income drawdown provides you with the greatest flexibility with your retirement planning.
• You’re not tying yourself into an annuity rate that is fixed for life.
• You can take a tax free lump sum, without having to start taking an income immediately.
• You can take a tax free lump sum and start taking a flexible income.
• You still have the opportunity to buy an annuity sometime in the future.

The main difference between income drawdown and an annuity is that your pension fund remains invested and you take an income directly from it. You have control over your retirement planning and can vary your income.

This table shows some of the choices available comparing a conventional lifetime annuity to income drawdown.

Income drawdown might be suitable for you if you have over £50,000 in your pension fund, and you’re looking for flexibility with your retirement planning. Call us free on 0800 1787 335 to find out more.

Your pension

Pension income

Let’s say you’re not sure about buying an annuity, either because of the recent fall in value of your pension fund, low annuity rates, or both. You could go into income drawdown, select a reasonable level of income, and leave your fund invested. You could then buy an annuity at a point in the future when the value of your pension fund might have recovered, or annuity rates are more favourable. You have that flexibility with your pension income.