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Taking your pension income in stages

If you don’t plan to retire completely, or have other income producing investments, you might only need to take part of your pension. Income drawdown lets you decide how much income you can draw from your pension, within limits, while leaving the remainder of your fund invested.

With income drawdown your pension fund remains invested and continues to benefit from any investment growth. You decide, within limits, how much income you need every year. Money is withdrawn from your pension fund to provide this income.

Income drawdown gives you more control over your retirement income. It also means you’re not compelled to buy an annuity at a time when annuity rates are poor.

Income drawdown is designed to work best with large pension funds. Because your pension fund is still invested, there is still a risk that its value could fall. The extent of the risk will depend on what your pension fund is invested in.

If you’re thinking about income drawdown, it’s wise to seek some professional advice from an independent adviser before you take any action.