Defaqto: 120% GAD rate not fit for permanent use

Carmen Reichman
clock

Defaqto has warned that advisers relying on the 120% capped drawdown limit could be jeopardising their clients' safe retirement.

The chancellor confirmed in last week's Autumn Statement that there won't be any changes to Government Actuary Department (GAD)-based drawdown rules, Defaqto insight analyst Richard Hulbert said the 120% cap on income drawdown should be used as only a "holiday" and advisers who opt for a level above an annuity rate should be asked to explain how they would monitor their clients' retirement funds. He warned that drawing out at 120% consistently will not last investors a ‘lifetime' and the regulator should have done more to clarify that point for advisers, when the chancellor brought th...

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

Join

 

Already a Professional Adviser member?

Login

More on Regulation

FCA urged to 'think again' on targeted support annuity rules

FCA urged to 'think again' on targeted support annuity rules

Regulator’s MoneyHelper signpost criticised as a ‘real limit’

Isabel Baxter
clock 03 September 2025 • 2 min read
FCA continues data reporting cuts

FCA continues data reporting cuts

Regulator removes more data returns

Isabel Baxter
clock 28 August 2025 • 1 min read
Regulatory and employment-related changes – what do firms need to prepare for?

Regulatory and employment-related changes – what do firms need to prepare for?

‘Getting these issues right is not just about avoiding regulatory action or tribunal claims’

Sophie White
clock 21 August 2025 • 4 min read