Flexible-Access Drawdown, sometimes referred to as simply “Drawdown”, is an invested retirement product that provides total flexibility to suit individual needs. Drawdown allows you to maintain total control over how much income you take from your pension pot, and when, leaving the rest invested for additional growth potential. Unlike other retirement income options, it offers full flexibility to make changes to your plan whenever required, such as altering the amount of income drawn and how funds are invested.
Tax-free lump sum
The first 25% of a pension pot is tax-free. With Drawdown, you can choose to take a 25% lump sum – or a portion of it – while leaving the rest of your funds invested for future potential growth. Income drawn from the remaining 75% is taxed at your relevant income tax rate and may be subject to change in the future. Your Independent Financial Adviser (IFA) will be able to provide you with further guidance on taxation*.
People who don’t want to take a lump sum can opt for each drawdown payment to be 25% tax-free (up to the total of 25% total pension fund) instead. Your IFA can help you decide if it is in your best interests to withdraw any, or all, of your tax-free lump sum.
Taking your Drawdown income
At Imperium Advice, your adviser will also help you decide how much, if any, income to take and when. As part of our service, you can contact the same adviser whenever your circumstances change – so if you need to make a change to your income strategy or alter where your funds are invested, they will be on hand to help.
The options available for taking your Drawdown income are varied, allowing you to select the method most suitable for your circumstances. With Imperium Advice, your dedicated and experienced adviser will discuss all of your options with you to help you make pension income decisions that best suits your individual needs. They will always act with your best interests in mind and offer truly bespoke advice.
As with all investments, there is a certain level of risk associated with Drawdown. The value of your fund can rise or fall, and it is possible that you may not get back the full amount invested. However, the objective is that you will enjoy healthy growth through the lifetime of the plan. Your Independent Financial Adviser (IFA) will work with you to understand your attitude to risk and capacity for loss, and your fund will be invested in a portfolio which is appropriate for your objectives and circumstances.
*The Financial Conduct Authority does not regulate taxation advice.