Did you know that over-55s in drawdown can vary the amount of income they receive? If you didn’t realise that was a possibility, you’re certainly not alone, as a recent YouGov survey commissioned by Zurich 3 discovered.
Despite income flexibility being a key feature of drawdown, the survey revealed that more than half (52%) of over-55s taking an income in drawdown are unaware they can reduce their withdrawals and a greater number (56%) didn’t know that they can stop them altogether. It’s not surprising to learn that for those who don’t take financial advice, the findings are even more bleak, with just 35% of non-advised retirees aware they can reduce their drawdown income.
Need to know
This research highlights a critical gap in awareness. There is a real danger to this ignorance as it puts investors unwittingly at risk of draining their pension pots if stock markets fall. Referred to as ‘pound- cost-ravaging’, this is where people are forced to sell more investments to achieve unsustainable income levels. Taking a fixed level of income could leave people unable to sustain their pots throughout their retirement. Drawdown provides the flexibility to move your income up or down as your spending needs change, or as markets fluctuate. You may perhaps choose to revert to natural income for a while.
Take control
Engaging with your drawdown savings is vitally important. Don’t make complex choices in drawdown without fully understanding how it works. We’re here to help you plan effectively. 3 Zurich, June 2019
It is important to take professional advice before making any decision relating to your personal finances. Information within this page is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.
Tax and Estate planning are not regulated by the Financial Conduct Authority
The value of pensions and investments and the income they receive, can fall as well as rise. You may get back less than you invested.
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