Income drawdown scheme

Income drawdown is also known as an unsecured pension. An income drawdown scheme allows a pension scheme member to continue to invest in a fund whilst receiving a limited income from the scheme.

This type of pension investment is only available to those aged over 75. Under an unsecured pension you can choose to immediately take a tax-free cash lump sum and then, as opposed to purchasing an annuity, leave the remainder of your funds in a tax-free fund.

An annual income can continue to be withdrawn from the fund. The income will vary depending on the limits set out by the Government’s Actuary Department (GAD). The minimum limit is nil and the maximum is 120 per cent of the figure set out by GAD.

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