Unsecured pension (USP) using income withdrawal/income drawdown

You can take a taxable income direct from your pension fund. This is also known as income drawdown or pension fund withdrawal.

This is an option available to many, but not all, private personal pensions. Some insurance companies will only allow income drawdown/withdrawal options if your pension fund is above a certain size, often £100,000. This is because it is often only considered viable for larger pension funds. It is normally also only useful for those with other sourcers of income.

The level of income must be up to an upper limit. (There is no minimum amount of income that must be taken). You must review your arrangement every five years to make sure it is within this upper limit and that your objectives are met. If you take this option, these reviews can be conducted with the assistance of Annuity Arrow and our experts.

Tax Free Cash may be taken, but only at commencment.

This option is also popular for estate planning purposes.  Should you die, any remaining funds can pass to your estate, subject to taxation.

Phased retirement and income withdrawal can be combined This means you could start to draw an income from just part of your pension fund on one date, leaving the rest of the fund intact. To increase your income at a later date, you could either increase the rate of withdrawal (provided you did not exceed the maximum limit) or start
to draw an income from a further slice of your pension fund.

You must then decide how to secure an income from your pension funds before you reach age 75. This generally means buying a lifetime annuity.

Please contact Annuity Arrow if you think this option might be suitable for you. We can then investigate your circumstances and provide suitable advice.

Please click HERE for our contacts page.