What is Phased Drawdown?

Phased Drawdown was originally introduced as a solution for those who gradually retire by allowing the pension fund to supplement any earned income.

In order to phase the Drawdown payments, the pension fund is split into segments. The pension fund will be invested in a portfolio of investments just like under the Drawdown option. A number of segments are then vested in order to provide the required level of income. Initially, the income will be made up of a lump sum and Drawdown in the first year. When additional income is required, further segments can be encashed.

This provides a tax-efficient form of income, however it should be noted that you will not receive a lump sum up front; any lump sum taken will be within the vested segment and form part of your income for one year.

The death benefits on the vested segments will be the same as under full Drawdown whereas the unvested segments will be the same as Personal Pension rules. The death benefits are very beneficial.

Please click here to view information on Income Drawdown.

To arrange a meeting or discuss your options further, call us now on our FREE helpline 0808 1787 335.