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Guide to Income Drawdown post-Budget

    CPD
    Approx.60min

    Introduction

    The maximum capped drawdown increased from 120 per cent to 150 per cent of the Government Actuarial Department (GAD) rate, while the minimum income requirement for flexible drawdown was reduced from £20,000 to £12,000.

    Further changes are also set to be made in 2015, which would see all limits removed in a move that would allow savers to encash their pension fully on retirement, taking the 25 per cent tax-free sum and the rest at standard income tax rates.

    It is vital that advisers understand the ramifications of the changes that have already come into force and grasp what options could be available for their clients next year.

    This guide covers what advisers need to consider for clients, the pros and cons of the different options and how deals could evolve as a result of chancellor George Osborne’s shocking Budget announcements.

    Contributors of content to this guide were: David Fox, sales and marketing director of Dentons; David Trenner, technical director of Intelligent Pensions; Stan Russell, pension expert at Prudential; Claire Trott, head of technical support at Talbot & Muir; Martin Lines, head of business development at Partnership; and Stephen Lowe, group external affairs and customer insight director of Just Retirement.

    Further reading

    Retirement update: Where Unit-Linked Pensions Sit (30 CPD mins).

    In this guide

    CPD
    Approx.60min

    Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

    1. What is the rate of death benefit taxation in cases where the fund is taken as a lump sum?

    2. When will the rules for income drawdown change again?

    3. What needs to be considered when drawing down funds, according to Mr Fox?

    4. Who should consider drawdown, according to Mr Trenner?

    5. What do clients with no need to make pension contributions in the future who are able to meet the MIR generally go for, according to Ms Trott?

    6. What type of product will be launched following the Budget changes, according to Mr Lowe?

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