Advisers should be aware income drawdown may not be the most sustainable way of providing income for their clients, and should consider a scheme pension instead.
Rowanmoor Pensions points out advisers need to warn clients taking out the maximum amounts as defined by the Government Actuary’s Department (GAD) could reduce their income as the value of the fund falls. It warns once the income levels exceed the return on the underlying investments then the fund value will fall and the longer the retiree lives the chances are greater that the income will have to reduce. David Seaton, director of Rowanmoor pensions says for example in an Alternatively Secured Pension (ASP), drawdown after the age of 75, the maximum level of drawdown is 6.93%, which with...
To continue reading this article...
Join Professional Adviser for free
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes