What is Income Drawdown?
Our default lifestyle option targets income drawdown for members in the PSP section.
This is a way of taking money out of your pension pot to live on in retirement. It can give you more flexibility over how and when you receive your pension. You can take up to 25% of your pension pot as a tax-free lump sum (subject to certain restrictions). The rest of the pot remains invested, giving it the potential for investment growth. You can then decide if you want a regular income, or taxable lump sum amounts as and when you need them. The amounts you take are taxed as income. The value of your invested pot can go down as well as up, which means the income isn’t guaranteed and you could run out of money.
How to access income drawdown at retirement
Unfortunately, the Scheme cannot offer members the option to take income drawdown directly from the Scheme. So, if you want the flexibility that this option offers, you need to first transfer out of the Scheme to another provider. There is lots of information on the Money Helper website about income drawdown and how to find a provider or an adviser to guide you through the process at www.moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension/what-is-flexible-retirement-income-pension-drawdown.
If you are over 50 you can also arrange for free, impartial guidance from Pension Wise on different benefit options that are available to you. You can book an appointment by going to: www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise