A Guide to Income Drawdown



A guide to income drawdown – New rules that give private and workplace pensions holders far greater freedom in how and when they access the cash value of their pension have introduced income drawdown as a popular alternative to traditional annuities.

An annuity is a guaranteed income for the rest of the holder’s life, bought in exchange for the value of a pension pot. Before the new rules, the vast majority of pension holders would buy an annuity on retirement, its size depending upon the value of the pot.

The annuities provider reinvests the value of the pension pot and hopes to generate enough cash flow from the investments to at least meet the annuity paid to the holder. On the annuity holder’s death, the payments are no longer due and the financial company that had provided the income is then takes all revenues generated from the investments as its own clear profit.

Topics covered in this Guide

  • Income Drawdown
  • Flexi-Access Drawdown
  • Combining Drawdown and Pension Contributions
  • Tax on Drawdown Income
  • Inheritance Rules
  • Initiating an Income Drawdown Plan
Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Getting Money Wise. The information provided on Getting Money Wise is intended for informational purposes only. Getting Money Wise is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

getting money wise

Welcome! Get your FREE access to EVERYTHING we publish…

Our goal is to show anyone how to make investing profitable. You’ll get our FREE weekly newsletter with latest news and information on investment topics along with special offers. Please take time to read our privacy policy . The information you provide us will be processed in accordance with this.