telephone: 0113 244 6100
Under income drawdown, a member of a money purchase scheme (whether a personal pension scheme or a company-sponsored money purchase scheme) withdraws income from his or her accumulated pension 'pot', instead of using the pot to buy an annuity at retirement. There are guidelines set down by the Government Actuary's Department to ensure that funds are not withdrawn too quickly, in a way that would prejudice the underlying capital pot. At the moment, the member must still buy an annuity by age 75.
There are specific taxation implications to consider when entering into drawdown arrangements. For example, the member needs to take into account a tax charge which may arise in certain circumstances on death during the drawdown period.