Annuities and Drawdown

In the recent past there’s been a belief that, having saved up a pot of money over your working life, you come to the point of retirement, invest your money in an annuity and live happily ever after. Not necessarily so.

You don’t have to invest in an annuity. You can invest, or not, in whatever you want…so wouldn’t you want to invest your capital into whatever will give you the greatest return?

There are options;  As an alternative to the traditional annuity there is the option of various Drawdown arrangements. These are not unlike annuities, in that you are able to take the tax-free cash; the difference is that rather than buying a fixed income for the life of the annuity, you can have greater flexibility with your income choices.

Following the Pension Freedoms legislation brought in by the Government in 2014, drawdown contracts have become more flexible than ever before.  You still have the ability to draw 25% of the fund without attracting taxation.  You can now drawdown higher lump sums than previously available, as well as a level of income that suits you.  This is subject to taxation and should only be considered after consulting a Financial Adviser so that there are no nasty surprises.  You can still use Flexible Drawdown which can prove to be very tax efficient.

In the Autumn 2014 Statement the government announced some radical changes to the way you can take benefits from your pension. Click on the link below to see how you might take advantage of the changes which came into effect on 6th April 2015.

Click Here

What does all this mean? That you need advice from a company that understands the implications of all this for you personally. That’s us.

For more details, or to arrange a no obligation meeting at our cost ring 01454 501 959. Or use the contact form and we’ll get back to you.