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History: Home UK Divorce Forum
Topic:
Pensions Income Drawdown (4 Posts)
Started By:
Date:
04 June, 2017 07:02PM
Pensions Income Drawdown
jill_of_all_trades - 04 June, 2017 07:02PM
Can anyone point me in the direction of a good pensions website that gives an overall picture of the technicalities of income drawdown please? The price of a clean break agreement - ie unyoke myself financially - may be taking pension early and annuities have a very bad reputation.
Re: Pensions Income Drawdown
Andyk - 04 June, 2017 07:57PM
income drawdown was scrapped for new policies from April 2015 and was replaced by Flexible Access Drawdown where basically you can take what you want, when you want, you are not subject to the capped drawdown GAD limits like the income Drawdown products were.

With Flexible Access Drawdown as soon as you take any money, if you are also paying into a pension you might be limited to £4K per year contributions. Any payment you take from the drawdown fu d will also be taxed at your marginal rate. Whilst annuities have had a bad press, they are a guaranteed income for your life, with drawdown you are in danger of the money running out of you take too much out in the early years.
Re: Pensions Income Drawdown
jill_of_all_trades - 06 June, 2017 07:51AM
Thank you for that. Do you know what happens to any money left in an account you drawdown from if you die before it is all used up?
Re: Pensions Income Drawdown
Andyk - 06 June, 2017 11:53AM
If you die before age 75 then I believe that it would be returned to either a nominated beneficiary (in which case it would be free of tax) or if no nominee or beneficiary then it would be paid to your estate and possibly subject to inheritance tax. If you die after age 75 and it gets paid to a beneficiary then they are taxed on it as if it were income.
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