How can I find the best Drawdown Pension?

lbeasant

I understand the principle of drawdown pensions but how can I find the best provider? This seems very difficult. Is it the same approach as any other insurance/investment – find a good financial advisor?

dunstonh

There is no one size fits all best provider.

This seems very difficult.

Not at all. its a case of knowing how you want to invest, which investments to use, which features you want, cost and who meets all that.

Is it the same approach as any other insurance/investment – find a good financial advisor?

Best not use an FA as you will be limited in choice. It is either DIY or use an IFA.

saintalan

How does Drawdown actually work?

Presumably it has to originally have come from a pension pot? So does the pot provide the DD or does it set up a different account? Does the whole fund have to be in any such account or is it drip fed?

Maybe the DD a/c itself can be in an investment?

I have read a lot about Flex and Income DD but haven't found anywhere that explains the mechanics.

Thanks and hope answers will be of help to OP.

Cheers

Alan

dunstonh

Presumably it has to originally have come from a pension pot?

theoretically, you can use any product. Any investment that you draw a regular income/withdrawal from is in effect a method of drawdown. However, in the case of pensions, there are specific rules that focus on (as there are with some other tax wrappers).

So does the pot provide the DD or does it set up a different account?

Depends on the investment strategy you use. A common one is to use a cash account to fund the next 12-24 months income and then periodically phase the investment rebalancing to reflect the ongoing withdrawals. It is not the only strategy as there are others.

Does the whole fund have to be in any such account or is it drip fed?

You can get phased drawdown, flexible drawdown and capped drawdown. So, you have choice.


It isnt something that can really be answered in simple forum post. The detail and issues can run into hundreds of pages of text. Some of which may or may not be applicable. You are better off reading up on it and then asking questions.

mania112

Unlike an Annuity, you can't compare the income and go with the provider which offers the best rate (they will all be the same).

Therefore, you need to consider:

Investment Choices
Costs
Features (online access for e.g.)