Drawdown  

Concerns raised about sustainable drawdown rules

Mr Carlson does long term cashflow forecasts for clients, but sets income levels annually according to their needs and market/tax conditions.

He said: "It’s not as simple as setting one rate at the date retirement and never reviewing or changing it."

Fiona Tait, technical director for Intelligent Pensions, warned of the need for timely reviews of the drawdown plan.

She said: "The publication of sustainable withdrawal rates is very helpful, provided it is used as a general guideline and not perceived as an assurance that every individual will be able to withdraw this amount and never run out of funds.

"I am concerned that the phrase ‘sustainable withdrawal’ might suggest that this is a decision that can be made up front and not revisited.

"For a lifetime income plan to work, regular reviews are required to ensure it can adapt as time goes on and unexpected market or life changes potentially knock it off track."

Figures published by the Financial Conduct Authority (FCA) in its Retirement Outcomes Review interim report in July last year showed the proportion of drawdown bought without advice has increased from 5 per cent before the introduction of pension freedoms to 30 per cent now. 

maria.espadinha@ft.com