Income drawdown

Investing some or all of your pension pot, while also taking cash withdrawals. Because your fund is invested, if the investment grows you will benefit in terms of a higher return, plus you can choose to take an income or make withdrawals from it, although there are limits on how much you can withdraw. There are downsides to drawdown. The fact your pension fund is invested means its value can fall as well as rise. Taking the maximum annual income allowed each year could also exhaust the fund completely.

 

See also: Enhanced annuity, Open Market Option, Capped drawdown, Flexible income drawdown, Hybrid pension schemes, Annuity

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