Alternatives to Flexible Drawdown

Posted: 24/06/2011 09:39:31 by Global Administrator | with 0 comments

Whilst we still await the full details of the Minimum Income Requirement to enable confident use of Flexible Drawdown, the effects of Capped Drawdown are being seen on individuals whose formal reviews are now falling due. Despite being five years older and irrespective of interim investment returns, quite sizeable reductions in maximum income levels are being revealed.

For clients unable to access Flexible Drawdown and for whom the loss of total capital on death is unattractive, Scheme Pension remains a real alternative.

The level of income set for Scheme Pension is often appreciably higher than that available under Capped Drawdown, particularly if the individual may have any health issues. Further, rather than lose the whole capital on death, any remaining capital can be distributed either through guaranteed instalments or in lump sum form, albeit subject to a single tax charge of no more than 55%.