Income Drawdown

Income Drawdown is a popular alternative to buying a lifetime annuity. It allows you to draw an income from your pension fund while the fund remains invested. There are two versions of this – Capped Drawdown and Flexible Drawdown. If you choose Capped Drawdown as your preferred option, you can take part of your pension fund as a tax-free lump sum.

Flexible Drawdown will enable individuals to draw income in excess of the 100% GAD limit. However, in order to do this they must first meet a Minimum Income Requirement (MIR) of £20,000 p.a. This £20,000 MIR may only be generated from the following sources:

• Basic state pension
• Additional state pension
• Scheme pensions
• Pension annuities

Other state benefits, drawdown income, purchased life annuity income and investment income do not count towards the MIR.

Please download our free guide to Income Drawdown >

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