Income Drawdown

 The ‘Pension freedom’ reforms have given people greater power over how they spend, save or invest their pension pots but these reforms have also lead more people to seek pensions advice.

The key benefits of the pension freedoms are;

o The removal of restrictions on how much can be withdrawn from your pension fund
o The reduction in tax payable on death

Since 1995, individuals have had the choice of taking income in the form of an annuity or using Income drawdown, which has typically been the preserve of people with pension funds in excess of £100,000.

Annuities should still be considered by people and in fact for some, an annuity as a stand alone option or in combination with income drawdown will be the best option.

The pension freedom rules allow more flexibility on how pension funds can be withdrawn and also provide more tax efficient benefits when passing on any residual funds to your beneficiaries on death. Therefore you should consider your options very carefully before making a decision that you may later live to regret.

Many people under estimate how long they will live and how long their pension funds will last them in retirement.

According the office for national statistics, the average 65 year old man will live for a further 18 years to age 83,  whilst a women will live to age 86.

You also a one in five chance of reaching the age of 90.

It is crucial therefore that timely professional advice is taken to ensure that you understand how much you need to have in your pension fund to produce the level of income that you need and also how much income your current fund can sensibly provide you with.

Milestone Wealth Management have extensive experience in helping and advising clients on the best income strategy for them, so please do not hesitate to contact us.