Pension Drawdown and Income Drawdown

financialgirl

As a freelance writer, I get asked to write about a lot of different stuff. As it so happens, I've recently been asked to write two separate articles - one on income drawdown and the other on pension drawdown. Now, as far as I was aware these were one and the same thing. But after this request, I'm not so sure. Can anyone enlighten me, please?

atush

Why someone is asking you to write about something don't know about is, well, not very logical. But so be it

They are the same thing. Once you 'commence' or start taking your private pension benefits, you need to decide how to take the income. there are 2 choices, Annuity or Drawdown.

Annuities are contracts bought from an insurance company that undertake to pay you a guaranteed income for life. you no longer have a pot of money, and there is nothing left to leave to others (although you can have included a spouse/dependents pension).

With Drawdown, you still have your pension pot. you can take 25% of it tax free (as you can with annuity too if you choose) and the rest is left invested and you can draw an income from it. It is limited to the GAD rate (set by the govt and based on gilt yields), around say 5% per year. If your income within the pot is greater, the fund grows and if it is less, your fund slowly shrinks. The rate is reset every 3 years or so, to make sure you don't run out of funds.

If you die during DD, unlike an annuity, there is something to leave behind. your spouse can get 100% of it, if left in the fund for their own pension, or the spouse or other beneficiary can take it as a lump sum subject to a tax charge of 55%.

SallyG

"I get asked to write about a lot of different stuff ...."
Who asks you?

srcandas

I can get this You need a fresh view, good unbiased research, input from numerous sources, ...................

And you want it to be entertaining, informative and well written. Possibly leading to the reader stimulated to ask further questions. An appetiser. Not an authorative reference.

If you ask an expert you are likely to get bored to tears with self centred opinion. Never occurs here of course

atush

Well god knows I am not expert lol.

Do they just want you to write about DD, or to compare and contrast the differences pros and cons over Annuities?

If so, and you do some searches here, you'll find a lot of info and opinion on them.

xylophone

http://moneyfacts.co.uk/guides/retirement/what-is-income-drawdown160211/
http://www.hl.co.uk/pensions/income-drawdown/what-is-flexible-drawdown
http://en.wikipedia.org/wiki/Income_drawdown

dunstonh

one on income drawdown and the other on pension drawdown.

Same thing. First one is not using pension wrapper (such as using ISA, investment bond or unwrapped investments). Second one uses pension wrapper.

mania112

They are the same thing and your article is being written twice to hit 2 SEO keywords, i'd say.

bigadaj

Well journalism generally has little to do with facts and is all about a good story.

mark55man

as opposed to financial journalism which to my mind is nowadays all about facts and has little about a good story

SallyG

It would be great if the OP could give us a link to the fruits of their unbiased labours.
Most financial information seems to be propaganda.