With flexi-access drawdown, when you come to take your pension you reinvest your pot into funds designed to provide you with a regular retirement income.
This income varies depending on each individual funds performance.
- The first choice you can make is to take up to a quarter of your pension pot (25%) as a tax free lump sum. You can then move the rest into one or more funds that allow you to take a taxable income at times to suit you. Most people will use it to take a regular income.
- You choose the funds to invest in that match your income objectives and attitude to risk and set the income you want.
- The income you receive may be adjusted periodically depending on the performance of your investments.
- Once you’ve taken your tax-free lump sum you can start taking the income right away or wait until a later date.
- You can also move your pension pot gradually into income drawdown.
- You can take up to a quarter of each amount you move from your pot tax-free and place the rest into income drawdown.
- You can nominate who you’d like to get any money left in your drawdown fund when you die.
- If you die before the age of 75, any money left in your drawdown fund passes tax free to your nominated beneficiary whether they take it as a lump sum or as income. These payments must begin within two years, or the beneficiary will have to pay income tax on them.
Income drawdown is a complex product. Capital & Income Solutions will be able to recommend whether it’s suitable for you and compare what’s on the market and find the most competitive product.
Enquire here to find out more about your Flexi-drawdown options.