![]() There's no limit on how much money you can take out of your pension fund each year. How much can you get from your pension fund But remember, the value of your income could also go down if your investments do badly. If your investments do well, your pension fund can carry on growing which means your retirement income will increase too. Instead of using all the money in your pension fund to buy an annuity, you leave your money invested and take a regular income direct from the fund. ![]() Income drawdown is a way of getting pension income when you retire while allowing your pension fund to keep on growing. ![]() Use some of the money from the pension fund to buy a series of short-term annuities to give you an income.įind out more about your options for taking your pension money. This is called income drawdown or income withdrawal, or You can either:ĭraw money from the pension fund itself to give you an income. One of your options is to leave some of your pension fund invested and take only part of it as income. You'll have a choice to make about how to get an income from your pension. Check with your pension provider if you're not sure what type of pension you have. The total amount of money you have for your retirement depends on how much was paid into the pot and how the fund's investment performed. 'Defined contribution' pensions are built up over time by you or your employer making regular payments into it. This information is for people who have a 'defined contribution' pension. You can find out more about Pension Wise on the MoneyHelper website. Pension Wise is a free and impartial service to help you understand what your pension options are. This page explains how income drawdown works, who it's suitable for and how you can decide whether it's the right choice for you. This is called income drawdown or income withdrawal. If you’d like to speak to an independent advisor, get in touch.One of the options for taking your pension is to leave some of the money invested and take part of it as income. They’ll also tell you about other ways to withdraw from your pension, such as phased drawdown or uncrystallised funds pension lump sums (UFPLS), that might be more tax efficient for you. They’ll tell you how much, and how regularly, to drawdown from your pension to ensure that you’re not paying more tax than you need to. An advisor’s role includes telling you how to withdraw from your pension in the most tax-efficient way, based on their understanding of your circumstances. How to get help reducing your tax billĪlmost everyone can benefit from getting independent pensions advice. In these cases, you might benefit from expert help to make your pension income drawdown as tax efficient as possible. Plus, many pensioners have more than one source of income. However, many people need more than that to live on. If you have no other sources of income and your expenditure is low, the most tax-efficient way to drawdown your pension is to keep your annual withdrawals under the personal allowance (currently £12,570), so you’ll pay no income tax. The answer will be different for everyone, depending on how much you have in your pension pot, how much money you need to live on, and what other sources of income you have. There’s no one way to drawdown your pension that’s universally the most tax efficient. What is the most tax efficient way to drawdown your pension?
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