Best drawdown pension professional#

Best drawdown pension professional#

The truth is that unless you are a seasoned wealth manager, pension planner or expat financial adviser, you are unlikely to posses the necessary expertise to take pension drawdown without the benefit of professional advice. This compared favourably with the 2 in 10 advice-uptake rate seen in consumers with pots worth £10,000 or less.** However, retirement savers with larger pension pots are more likely to take advice 7 in 10 consumers with funds worth £100,000 or more sought regulated advice. This is slightly worse than the 31% seen in 2017/18** and still well short of where the situation should be. Seek Regulated Pensions AdviceĪccording to data from the Financial Conduct Authority, between Apto Ma(2018/19), 34% of individuals who took pension drawdown products did so without taking regulated advice. Having said this, the needs of expat retirement savers are individual, so you should always speak with an accredited and regulated expat pension adviser before making any decisions regarding pension drawdown and transfers. Instead, the FCA suggests an asset allocation of 50% equities, 20% government bonds, 20% corporate bonds, 7% property and just 3% cash.* The Financial Conduct Authority (FCA) has said that it will look into the possibility of preventing SIPP holders from investing solely in cash. Doing so is little better than keeping money under a mattress and can result in significant loss of opportunity. However, this doesn’t mean that you should keep your fund entirely in cash savings. If you are overly invested in any single country, region, asset class or sector, you risk losing all or a significant part of the fund in the event of any seismic or even isolated political, economic or market event which affects the markets. If you choose to do this, it is absolutely essential that any portion of your savings pot you allocate to pension drawdown is sufficiently diversified. In most cases, as previously highlighted, you can take up to 25% of your pension as tax-free cash while leaving the rest invested. But you must be aware that returns are never guaranteed. Consider your pension drawdown options, because by investing, you can unlock growth. Pension drawdown products can be a flexible way to use your savings the way you want to. Your pension pot will remain invested until you act, making these the best funds for income drawdown if fluidity of income is your aim. The difference between a flexi-access drawdown pension and a capped pension drawdown, is that, with a flexi arrangement, you are able to withdraw lump sums from your pension pot beyond your initial 25% tax-free total.īecause a drawdown pension is ‘flexi-access’, it is up to you, as the retiree, to decide how you manage your money with more freedom than a capped drawdown pension plan offers, whether you continue to take regular income or sporadic lump sums. However, while you’re able to continue benefiting from this scheme if you’ve been retired for some time, this pension drawdown has been unavailable for new retirees since 2015. This limit is worked out using Government Actuary Department (GAD) rates. These allow you to withdraw your initial 25% lump sum, tax free, before limiting, or capping, the income you can continue to take. If you began exploring pension drawdown options prior to April 2015, you may have come across capped pension drawdown products. However, before you consider changing your plan, or entering a new drawdown pension, you should consider the two types: capped and flexi access. This way, you can get those most out of your pension, and maximise your return by capitalising on the best funds for income drawdown. Whether you’ve already withdrawn your lump sum or considering the best drawdown pensions for the near future, it’s important to browse the market and shop around. Any subsequent lump sum withdrawal is subject to income tax, according to standard rates. Instead, your money remains invested, usually in the stock market, which can be risky, as the market can be volatile and fluctuate.Īt 55 years old, you can begin to consider the best funds for income drawdown in retirement, as well as take the first 25% of your pension tax free. A drawdown pension is a way of taking money out as income in retirement, without withdrawing your entire pension pot.