Income Drawdown / Unsecured Pension - Financial advisers, investment, wealth management and pensions advice

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(Please note - Income Drawdown is a complex and constantly changing subject and the information provided here reflects the current situation. For more information call us today or complete our short enquiry form and we'll be pleased to help you further.)

Traditionally, when the time came to retire, most people with defined contribution (DC) pensions, either used their whole pension fund to buy an annuity or used the remainder to do so after taking their entitlement to tax-free cash (normally 25% of the fund). They did so because they either didn’t qualify for income drawdown or were not willing to accept (or were unable to afford) the associated investment risk.

Since income drawdown was introduced some years ago, anyone of retirement age with a DC pension has been able to take income directly from their pension fund without needing to buy an annuity. Now, with the introduction of new 'income drawdown' rules, anyone with a DC pension and age 55 (57 in April 2028) or over, can use income drawdown to provide the income they need in retirement. Pension savers who are currently in a capped drawdown can move out of that arrangement whenever they choose.

How Income Drawdown Works

Rather than exchanging your pension savings for an annuity (a fixed and regular income for life paid by the pension provider) the pension fund is left invested and you draw income directly from the fund. As the bulk of your pension remains invested the fund is still able to benefit from any growth (or not!) in the value of its investments. There’s no limit to the amount of income you can withdraw — you can draw as much (or as little) as you like, even the entire fund if you want.

And unlike an annuity, in a drawdown arrangement, the pension saver keeps their pension pot.

Tax implications

Although you can withdraw up to 25% of your pension fund tax-free, anything else you withdraw from your pension pot will be treated as income and as such subject to the marginal rate of income tax.

Considerations

Income drawdown plans are a higher risk than a secured income arrangement such as a pension annuity, as the underlying assets of the fund are usually invested in the stock market. To ensure the pension fund does not run out of money, the member will require investment advice and regular reviews.

Some income drawdown products can be expensive in terms of charges, although they normally vary between 2% and 4% a year.
It’s also helpful if you have some experience in managing investments.

Please note we provide advice, not a facilitation process, if you engage us for services we will assess your suitability and we may deem that a drawdown is not suitable for your needs, in which case we will not recommend this.

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***** 5 out of 5

What were the circumstances that caused you to look for a financial adviser?

I co-own a production company and Daren has helped set up our pensions, insurances, investments and wills.

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He clearly explained everything we need and what we should invest in, he made it easy to understand and straight forward.

Have you seen the outcome you were hoping for?

We have seen a good outcome with Daren’s recommended investments and pensions.

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What were the circumstances that caused you to look for a financial adviser?

Pension, auto enrolment, insurance, shareholders protection

How did Daren help you?

Daren is extremely helpful, knowledgeable and approachable. He talked us through all the processes and made everything understandable and straight forward. Really great customer service from the whole team too.

Have you seen the outcome you were hoping for?

Absolutely

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What were the circumstances that caused you to look for a financial adviser?

I needed an income to pay for my wife’s care home costs.

How did Daren help you?

Daren has been a tower of strength and knowledge. He is extremely knowledgeable and has looked after all aspects of financial planning in turbulent times. I am very happy with the care and expertise given to me.

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What were the circumstances that caused you to look for a financial adviser?

I had a sum of money that I wanted to invest and my wife had money invested that was not working well so she wanted to transfer the money to a Fund that would do better.

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What were the circumstances that caused you to look for a financial adviser?

Daren has been giving financial advice to me and my wife for the past years. His clarity and really good advice has been invaluable, especially from the moment George Osbourne freed up pension regulations.

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Intelligent advice. Plain speaking. Excellent service. The three guiding principles of Ginkgo.

The best time to start a pension plan is now - and if you have already started, have a closer look at your arrangements to make sure you are on track.

The best time to start a pension plan is now - and if you have already started, have a closer look at your arrangements to make sure you are on track.

The government’s pensions freedoms regulations give holders of a personal pension greater flexibility in how they can access and use their fund.

With so many types of savings and investments, it’s wise to begin with expert advice on the potential risks and rewards for your personal situation.

Alternative investments are dynamic, higher risk investments in environments the UK government wants to support, such as future technology.

Planning now for the inevitable fact that we won’t be around for ever is one of the kindest things we can do for our loved ones.

Planning now for the inevitable fact that we won’t be around for ever is one of the kindest things we can do for our loved ones.

Crossing fingers is not enough. Protect yourself and your family financially by making money available, should something unexpected happen.

You probably already protect your business’s property and other assets. So don’t overlook your most valuable assets: your staff and shareholders.

A mortgage is one of the most expensive, complex purchases you’ll ever make. With thousands to choose from, it makes sense to take professional advice.

With advance planning and an effective tax strategy, you can avoid paying more to the government than you need to.

Our handy calculators were developed by mathematicians to help you get a handle on some of the figures behind your biggest financial decisions.

The freedom to be who you want to be

Income Drawdown /
Unsecured Pension

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How Income Drawdown Works

Tax implications

Considerations

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Intelligent advice. Plain speaking. Excellent service. The three guiding principles of Ginkgo.

The best time to start a pension plan is now - and if you have already started, have a closer look at your arrangements to make sure you are on track.

The best time to start a pension plan is now - and if you have already started, have a closer look at your arrangements to make sure you are on track.

The government’s pensions freedoms regulations give holders of a personal pension greater flexibility in how they can access and use their fund.

With so many types of savings and investments, it’s wise to begin with expert advice on the potential risks and rewards for your personal situation.

Alternative investments are dynamic, higher risk investments in environments the UK government wants to support, such as future technology.

Planning now for the inevitable fact that we won’t be around for ever is one of the kindest things we can do for our loved ones.

Planning now for the inevitable fact that we won’t be around for ever is one of the kindest things we can do for our loved ones.

Crossing fingers is not enough. Protect yourself and your family financially by making money available, should something unexpected happen.

You probably already protect your business’s property and other assets. So don’t overlook your most valuable assets: your staff and shareholders.

A mortgage is one of the most expensive, complex purchases you’ll ever make. With thousands to choose from, it makes sense to take professional advice.

With advance planning and an effective tax strategy, you can avoid paying more to the government than you need to.

Our handy calculators were developed by mathematicians to help you get a handle on some of the figures behind your biggest financial decisions.

The freedom to be who you want to be

Income Drawdown /Unsecured Pension

Body

How Income Drawdown Works

Tax implications

Considerations

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