Capped drawdown pensioners warned on falling income

Since April 2006, the yields used in calculating maximum income have been as high as 5.25% and only once fell below 3.5% to 3.25% in April 2009. However, as investors flocked to safe havens as the equity markets plummeted, yields on 15-year-gilts fell to 3.25% last week. Rowanmoor warned for a 70-year-old male, a reduction of just 1% in gilt yield reduces income by 10%. Director of actuarial services David Downie said: "If this situation continues to mid-August, the gilt yield used for reviews that fall in September, or those taking benefits for the first time, will be 3.25%. This ...