How does it work?

Pension Drawdown plans, capped or flexible, also referred to as Income Drawdown, Income Withdrawal, Pension Withdrawal or Pension Release allow you to take benefits (tax-free cash and an income) from your pension funds without buying an annuity. From April 2010, the minimum age that you are able to take benefits is 55 (previously 50).

From 6 April 2011 existing income drawdown rules were replaced by new rules known as Capped Drawdown and Flexible Drawdown. This replaces both existing rules for Unsecured and Alternatively Secured Pensions (USP and ASP).

Taking benefits from your pension before the normal retirement age of 60 or 65, is sometimes referred to as "unlocking your tax free cash". Some people want to unlock their tax free cash early to use the funds to clear debts or repay a mortgage and the present rules allow you to do this from age 55. You do not have to stop work in order to take your benefits. You must bear in mind though, that by taking the tax-free cash (and any income) early you are reducing the funds available for you when you reire.

From the time of taking benefits (known as crystallising your fund) you can use Pension Drawdown to take both tax-free cash and an income. The fund remaining after taking tax-free cash is still invested as a pension fund, continuing to benefit from a tax efficient environment in the same way that it did prior to taking any benefits. You can take benefits from both Protected and Non-Protected Rights.

Download our comprehensive pension options guide by clicking on the above image.

Financial Advisers

Jonathan Walker
Jonathan is the director and joint owner of the Pension Drawdown Company.

Robert Bolton
Robert is a practising Barrister and is also fully qualified as a Diplomaed Financial Adviser.

Bob Diamond
Bob is a Pension Specialist who has been with the company since its incorporation in 1996. Bob has been a financial adviser since 1989.

Andrew Ross
Andrew is a diplomaed financial adviser with a history in banking.

Roger Easterbrook
Roger is a diplomaed financial adviser with a background in Executive Search.

Click here for more team members.

Market Monitor

Updated: 14th May 2012

Heavy selling following the elections in Europe and banking woes in Spain resulted in markets ending the week lower. Weekend elections in Greece and France set a volatile tone and reminded investors that politics really matter in financial markets; political wrangling in Athens to form a government resulted in threats to unravel the country's bailout deal and raised the prospect of Greece exiting the euro area.

Global stocks had their longest losing period in six months during the week and the euro its worse run of daily reverses since 2008.

However, Thursday marked a turning point as investors cautiously returned to markets and risk assets showed resilience following $2bn trading losses at JPMorgan Chase (which also occurred on Thursday). In addition, the Michigan survey of US consumer confidence, which rose to a four-year high in May, also helped to provide support and end the week on a more upbeat note.

The increasingly gloomy outlook for the global economy sent commodity prices to their second week of losses, and gold retreated to four month lows. Weakness in the global economy drove demand for safe-haven government bonds, which pushed German bunds and UK gilts to record lows, while peripheral eurozone debt came under heavy selling pressure.

Important information: This update is intended to be for information purposes only.

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