The Budget has been described as the death knell for annuities and a welcome boost for income drawdown. Barry O Sullivan looks at how the rules change the face of the pensions market and what should an adviser's strategy be going forward?
In terms of the immediate changes, the first is the change to GAD from 120% to 150%. It doesn't seem too long ago that 100% GAD rates were introduced to bring caution to the drawdown market on the back of economic collapse. Two GAD changes later and we now have access to 50% more income. However, it does give flexibility for clients to take some more income, which could avoid crystallising another pot into drawdown. For example, a 65-year-old starting a drawdown can take a maximum income of 8.85% (based on 3.00% GAD yield). But advisers still have to make sure that drawdown is suitab...
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