Government urged to restore 120% drawdown limit

gadgetmind

http://www.ft.com/cms/s/0/dc10a12e-e2a1-11e0-897a-00144feabdc0.html

What I really like is the last paragraph, were the FT go beyond the press release and rely on their own knowledge to add more info, which results in something that inexcusably confuses drawdown with flexible drawdown and subtracts from the article rather than adding to it.

IMO HMG should allow 120% until SP age and then maybe drop to 100%.

Old_Slaphead

In case you're blocked from FT - AJ Bell thinks so too

http://citywire.co.uk/new-model-adviser/aj-bell-urges-govt-to-overhaul-income-drawdown-rules/a525029?ref=new-model-adviser-latest-news-list

BTW gadgetmind - SP age ?

gadgetmind

Old_Slaphead wrote: »

BTW gadgetmind - SP age ?

Sorry, one abbreviation too many, State Pension age.

SippTechie

For those without FT access, that article is also about the letter to Mark Hoban which the Citywire article refers to. The full letter can be found on the A J Bell website.

The letter calls for the immediate re-instatement of the 120% limit to prevent significant falls in income which are being seen at the moment because of the coming together of a number of factors - some Government created, some economic.

The wider call is for the drawdown calculation to be de-linked from gilt yields altogether.

It is a strange situation that someone who had their pension reviewed in March of this year had their income for a full 3 years based on a gilt yield of 4.25% whereas, if their calculation happened to fall only seven months later, their income would be based on a gilt yield of only 2.75% for a full 3 years.

A fairly significant difference in income only made worse by the fact that the person in March could use 120% of the figures in the GAD tables which they can't now do, and because the tables used in March have been replaced by new tables which are lower for many people.

gadgetmind

SippTechie wrote: »

For those without FT access

Search for "Government urged to relax drawdown limit financial times" on google, click on the first news link, and you'll get the article. You can also probably fake up your referer but the google work around is easy enough. Because this is how I hit the article, I didn't realise that the FT tried to restrict it. Sorry.