Understanding Pensions
Pension Planning
Pension planning is a big consideration when you plan your retirement. The aim is to take steps to ensure you have enough income to retire with the lifestyle you want. There are many aspects to pension planning, and you should consider them all, and consider them early. You will be in a better financial position the sooner you take steps, rather than waiting until state pension age (or after).
Pension Drawdown
There are a few ways you can access your defined contribution pension when you reach 55 (57 from 2028), and a pension drawdown is one option.
This article discusses the new generation of income drawdown arrangements (set up after 6th April 2015) which are also referred to as ‘income drawdown’, ‘flexi-access drawdown’ or ‘flexible retirement income’.
Pension Freedom
Before the Pension Freedom legislation was introduced, you were restricted to taking your pension savings as regular payments after the tax-free 25% cash withdrawal. This usually meant purchasing an annuity, but for some who met the right criteria, they had the option to take a drawdown.
Since April 2015 bought about Pension Freedom, you can now choose how you access your personal pensions. We explore these options below, so you can better understand how you can draw from your pension pot