Drawdown as an investment?

TINKERBELL

Hi can anyone offer any advice please? My parents are in their 70's and are considering the advantages of a drawdown investment; can anyone advise on this?

quotememiserable

Drawdown is a way of accessing money from a pension pot you already have, as an alternative to an annuity, are you clear about that?

kidmugsy

Do you mean a style of equity release scheme on their house?

dunstonh

Drawdown is a term specific to pensions but the principle can be applied across any tax wrappers.

Can you explain what you mean by a drawdown investment as it isnt clear from your post. i.e. they are in their 70s. So, they have probably already drawn their pensions. So, drawdown wont be an option for them in that case.

TINKERBELL

To be honest I know very little about pensions. My father has a pension but my mum only has the state pension. They have various bonds etc which aren't generating much income at present. My father is contemplating "buying" my mum a pension which would generate a monthly income for her or alternatively he mentioned another option which was to do with drawdown. He wanted me to post a question regarding the tax implications of drawdown?

mania112

If your father is thinking of paying a lump sum to provide your mother with an income from drawdown straight away, that is unlikely to work in practice.

The max you can pay into a pension in a year is the lesser of £50k or relevant income.

If your mum earned £50k or more, that would provide quite a low income in isolation, probably not enough to live on.

kidmugsy

If your father wants to buy some pension for your mother a possibility is an Immediate Vesting Personal Pension. I believe that Standard Life and NFU offer them.