What about using income drawdown instead of the best UK pension annuity rates. Income drawdown, or unsecured pension as it is now known, allows personal pension plan holders to opt for regular or ad hoc withdrawals from their pension fund (i.e. pension drawdown) instead of being required to buy an annuity with their pension fund. The remainder of their pension fund stays invested with an insurance company. This gives the pension plan holder more control over their pension arrangements. However, at age 75, you must purchase a pension annuity.
Significant advantages of income drawdown comes down to flexibility. You have the ability to take the tax free lump sum of up to 25% while leaving the pension fund invested in the stockmarket and you get improved death benefits for a spouse or beneficiaries should you die prematurely. Although this option may be riskier than taking the best UK annuity rates with an annuity to begin with, you could save money by reducing the income taken in some years, thus avoiding potential higher rate tax liability.


