pension options direct logo

Flexible Drawdown Pensions Services Taunton

PENSION INCOME SPECIALISTS

CONTACT US

Would you like a quote?

ALL FIELDS ARE REQUIRED

WHAT PRODUCT ARE YOU INTERESTED IN? (SELECT)

PLEASE ENTER YOUR DATE OF BIRTH & POSTCODE

HOW MUCH IN SAVINGS DO YOU HAVE? (£)

YOUR QUOTE REQUEST WILL BE RECEIVED BY OUR TEAM AND WE WILL RESPOND SHORTLY.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Flexible Drawdown Pensions Services Taunton

What are Pension Drawdowns?

Since the introduction of the so called ‘Pension Freedoms’ in 2015 pension drawdowns have become the preferred method of accessing pension investments for many people.

A pension drawdown arrangement allows you to access your pension in a more flexible manner than purchasing a set income for the remainder of your life which is what a lifetime pension annuity does. Pension providers have launched flexible drawdown products with lots of different features, benefits and options but however they are marketed they will fall into one of two categories; Guaranteed Drawdown and Non-Guaranteed Drawdown.

pension options direct logo

Flexible Drawdown Pensions Services Taunton

Guaranteed Drawdown

Flexible Drawdown Pensions

Where the return from your pension investment is set at the outset and you know exactly how much you will receive over a pre-determined period of time. These products permit you to access your Tax Free Lump Sum which is normally up to 25% of the total pension investment and draw whatever income is required from the remainder or leave it for a set period of time (usually a minimum of 3 years) with the certainty of knowing exactly what the return is by the level of income provided or the guaranteed maturity value if the money is left alone.

These types of arrangements are suitable for people who want the certainty of knowing exactly what their pension investment will return regardless of stock market conditions or life expectancy and suit the more cautious investor.

pension options direct logo

Flexible Drawdown Pensions Services Taunton

Non-Guaranteed Drawdown

Flexible Drawdown Pensions

Where the return from your investment is not guaranteed and there is a degree of investment risk. These products also permit you to access your Tax Free Lump Sum and either draw income from the remainder or leave it for a period of time but with no certainty as to what return will be achieved.

These types of arrangements are suitable for people who prefer to apply a degree of risk to their investment. Because of the inherently complex nature of risk and reward and the danger that pension money can be lost we recommend that Independent Financial Advice be taken by anyone wishing to invest in a Non-Guaranteed Drawdown arrangement.

pension options direct logo

Flexible Drawdown Pensions Services Taunton

Rules

Flexible Drawdown Pensions

There are certain rules which apply to whichever method of pension drawdown is selected, the basic one’s are:

  • Normally up to 25% of the initial investment can be taken as a tax free lump sum.
  • Income drawn after any tax free lump sum has been paid is treated as ‘Earned Income’ and subject to income tax and paid under normal PAYE rules with tax deducted at source. This applies whenever the money is taken.
  • Any death benefit is paid free of tax if the plan owner dies before age 75.
  • Any death benefit is subject to income tax at the recipients’ highest marginal rate if the plan owner dies after age 75.
  • When taxable income is drawn after any tax free lump sum has been paid the amount that the plan owner is allowed to invest into a new pension investment reduces to £4,000 per annum.
brand-logo-just
brand-logo-lve
brand-logo-legal-general
brand-logo-canada-life
brand-logo-aviva

important things you should know

FREQUENTLY ASKED QUESTIONS

Flexible Drawdown Pensions Services Taunton

Most pension investments allow up to 25% to be taken as a Tax Free Lump Sum. Anything drawn over this amount will be subject to income tax at your highest marginal rate. Tax will usually be paid under an emergency tax code with any overpaid tax repaid in the following tax year or earlier if you put a claim into HMRC.

Click here to calculate the amount that will initially be deducted.

Also known as a ‘Money Purchase’ pension this is a pension where the benefits are not defined and the value of the pension investment will depend entirely on how much money has been paid in and what return on the investment has been achieved.

Often referred to as a ‘Final Salary’ pension which is where the benefits that the pension will provide at retirement are defined and not dependent on how much money has been paid in. These types of pensions do not have a published investment value though it is usually possible to obtain what is known as a Cash Equivalent Transfer Value (CETV) where the scheme administrators will calculate how much they are prepared to let you have if you forgo the defined benefits built up whilst you were a scheme member.

Tax will most likely have been deducted under PAYE rules using an emergency tax code. You can either wait until HMRC reconcile your tax affairs in the next tax year or claim for early repayment of any overpaid tax by using form P53 or P53Z. These forms are available from www.gov.uk. 

You cannot normally access the money in your pension before age 55.

Our business model involves us asking you a series of questions designed to enable us to gather sufficient information and understanding of your requirements that we can present you with information on all of the options available to you. We aim to do this in such a way that you are fully empowered and confident enough to make an informed decision as to the best outcome for your personal circumstances. If at any time during the process it becomes evident that you require and/or need formal recommendations for a particular course of action and we will refer you to an independent financial adviser.

Enhanced Annuities

VISIT PAGE

Enhanced annuities work in the same way as a standard pension annuity but also consider your lifestyle and health conditions. If you qualify for an enhanced annuity you would expect it to provide more income for the rest of your life than a standard pension annuity would provide.

Lifetime Annuities

VISIT PAGE

A lifetime pension annuity is designed to provide you with an income and is payable for the rest of your life as a minimum. The funds that you have saved into your pension pot are used to purchase an annuity either from your existing pension company or from a new pension income provider.

Fixed Term Annuities

VISIT PAGE

A Fixed Term Annuity is a type of Guaranteed Drawdown product designed to allow you to access your pension in a more flexible manner than purchasing a set income for the remainder of your life which is what a lifetime pension annuity does. They provide a guaranteed return on your investment.

Flexi Access Drawdown

VISIT PAGE

Flexible Access Drawdown products provide a flexible way to take your pension and range from relatively low risk products with guaranteed returns to high-risk products investing in all manner of asset classes. Whilst providing flexibility they do not give a guaranteed income for the whole of life. 

Releasing Tax Free Cash

VISIT PAGE

When you are 55 or over you can access your pension and, if you wish, take a tax-free lump sum. You can then invest the remainder in a pension product and either take an income or keep it invested. You can normally take up to 25% of your investment tax free and use this money as you wish.

Tax Free Lump Sum

VISIT PAGE

If your pension has not been crystalised (accessed previously) you can take a tax-free lump sum from the pension investment. This is normally in the form of a 25% tax free lump sum payment, but some types of pension schemes do have enhanced benefits and permit more than 25% to be taken.

State Pensions

VISIT PAGE

The Basic State Pension is available to men born before 6th April 1951 and women born before 6th April 1953 and the New State Pension available to those born later. We have links to the Government information pages and the State Pension Age Calculator and a link to obtain your State Pension Forecast.

Equity Release

VISIT PAGE

Is a way of taking some of the equity (investment wealth) built up in your property as tax-free cash to provide additional income in retirement or to pass over inheritance money to the family before dying, repay other mortgages or borrowing or to just spend on something you have always wanted.  

pension options direct logo

PENSION OPTIONS DIRECT

What areas do we cover?

With our office in Ilminster we can provide face to face meetings for people in the Somerset area including Taunton and Yeovil. We are may also be able to arrange face to face meetings in the areas of Bridgwater, Glastonbury, Shepton Mallet and Wells areas. 

We are happy to have video meetings with people and therefore can provide a visual meeting to anyone in the UK. We are happy to talk through your options over the phone regardless of your location, so we can discuss your needs. We also are very happy to communicate with you through email which many customers now prefer, we can therefore provide a full UK coverage.