What is Flexi-Access Drawdown?
Drawdown?
Flexi-Access Drawdown lets you decide how you would like to invest your funds and how much income you take if any. When you move your funds into drawdown up to 25% of the fund can be taken as a tax-free lump sum. The income you take is taxable.
Benefits
Offers a flexible income with the potential for capital growth
There are no limits and you have complete control and flexibility for taking income and cash
You can choose how you want to invest – according to the level of risk you want to take
You can access your pension in a way that meets your needs e.g. making a withdrawal to cover a one-off purchase
You can use your income drawdown fund to buy another type of retirement income product at any time
If you pass away, the remaining funds can be passed down to your chosen beneficiaries
Things to consider
Unlike a lifetime annuity which provides a guaranteed income for life, drawdown involves more risk and your income is not secure
You will have to regularly review how your drawdown plan is performing
You run the risk of running out of money if you take too much income, or if your investment does not perform as well as you had planned for
If you choose to buy an annuity at a later date, the income may be less than if you had bought one at the outset
How does Flexi-Access Drawdown work?
Move your pension into drawdown
You can move your pension into drawdown in one go or gradually. You can access up to 25% of the funds moved into drawdown as a tax-free lump sum. You can use all of your tax-free allowance straight away or save some for later.
Your investments
The remaining pension is invested based on your retirement needs, income objectives and attitude to risk. Depending on the provider selected you will have access to a wide range of investment options and your pension savings have the opportunity to grow (although this is not guaranteed).
Taking an income
You control how much income you wish to take (if any). You can change this amount and how often you take an income. You may decide you don’t want an income but would like to withdraw cash as and when you need it. The income you receive is taxable and can fluctuate depending on the performance of your investments.
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