Large number of savers are opting for income drawdown plans when cashing in their pension funds. Drawdown allows those over fifty fives to take as much or as little income out of their pension pot while leaving the rest invested.
These plan are now far more popular than annuity contracts. Annuities pay a regular guaranteed income for life. They offer little in the way of flexibility and returns are presently very poor. This is due to low interest rates and gilt yields.
Although drawdown schemes offer flexibility there is a danger of withdrawing too much money out early on and making poor investment choices. We out a sound financial plan you could run out of money. A basic rate tax payer could also find that they are paying the 45% additional rate tax buy taking that lump sum when they should have spread the withdrawal over a number of years.
The Financial Conduct Authority says that 30 per cent who take drawdowns do not take any advice.
Christopher Woolard from the FCA said-
“Drawdown is complex and these consumers may need more support and protection”.
At Anstee & Co we are independent financial advisers. We will get to know you and your current financial situation.Then look at what you are wishing to achieve. Only when they have a full understanding of your situation will they offer their unbiased financial advice. The financial advisers make use of cash flow modelling software to help in their research The first meeting is free of charge.
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