Should my Dad use a drawdown for his 48K pension pot instead of an annuity?

dunstonh

There certainly is not a stamen saying “you have 14days to change your mind and we advise you take independent financial advice”for example.

Then you dont have all the paperwork. Providers all include a disclosure about seeking independent advice and the open market option.

It is possible that it can be stopped if the conversion to annuity has not yet happened. However, he needs to be very quick about it.

nexus7

Correct me if I'm wrong but is a drawdown only suitable if you have a guaranteed income of at least £20k a year?

If the pension pot is only £48k (unless there are other funds/income streams we're not aware of) surely drawdown isn't applicable here?

gadgetmind

nexus7 wrote: »

Correct me if I'm wrong but is a drawdown only suitable if you have a guaranteed income of at least £20k a year?

There are two kinds of drawdown. If you are drawing a guaranteed income of £20k pa*, you can use Flexible Drawdown and take out as much as you like whenever you like. Of course, it's all taxable.

Failing that, you need to use Capped Drawdown, where GAD rates apply to how much you can take each year.

You can use drawdown for small pots but the fixed annual fees make it less and less viable.

* - some income sources count and some don't. DYOR.

edinburgher

Correct me if I'm wrong but is a drawdown only suitable if you have a guaranteed income of at least £20k a year?

I think you're thinking of flexible drawdown?

JackSprout

I know it's a funny old attitude, however he is looking really relaxed and reallylooking forward to his retirement my mother is staying on for a bit and whenthey both retire they will be a about 1k a month down a month which they thinkthey can live with. Plus they will have a £60K lumps sum about 5 years.

I spoke to the provider today and they have put a hold on the pension andare sending out a new valuation so we were just in the nic of time.

This has made me think quite gravely about my own situation, I am now maxingout my own pension contributions and I am in the process of setting up a self-managedSIP I am now 39 and want to be out of engineering by the time I’m 55 the beancounters are killing it. Just now I was trying to justify the fact that it’sgoing to take only double the man power to do a job next year that is threetimes more complex than I did this year – completely impossible.

Think I have given up on the draw down it was difficult enough trying toexplain that shares are held within these things called funds!