Many financial planners fear that people are paying more tax than they need to because they do not fully understand the rules around withdrawing money from their pension.
When the pension freedoms act came into force back in 2015, one of the key changes was that you could take an income from your pension pot, while still leaving it invested.
This is known as “pension drawdown”.
Pension drawdown. What is it?
In the past, it was normal that most people cashed in their pension pot to buy an annuity. The annuity guaranteed them a set income for life. On the downside, annuities provided little flexibility and the payments reduced as life expectancy increased and investment returns reduced.
As an alternative pension drawdown is a way of taking money out of your pension pot to provide your income. It offers far more flexibility as you can take out the amounts you need when you need them. The downside is that there are different ways of going into drawdown, with various tax implications, which is where the confusion arises.
How Anstee & Co can help you?
“When” and “the amount” you withdraw from your pension pot can have a large impact on your tax bill. By looking at your planned expenditure over the years you can, with the help of a financial planner, minimise the tax you need to pay.
Why not contact us to see how we can help you? The initial fact-finding meeting is free and without obligation. Meetings can be arranged at time and location that is convenient for you.
We have offices located at-
- Kettering, Northamptonshire
- Stamford, Lincolnshire
- Birmingham, Snow Hill Queensway
- London, Pall Mall
Finally, as a firm of Independent Financial Planners, the advice we give is unbiased. We are registered with the FCA.