What's the difference between annuity and pension drawdown?Īn annuity is a guaranteed income, whereas drawdown is like taking money out of a bank account - it may not last as long as you do.įor some people, an annuity is likely to be the most appropriate option. Annuity rates may be at a worse level in the future.Legislation may change in the future, which may make flexi-access drawdown less attractive or tax efficient.There are ongoing charges for continuing to keep your pension fund invested.The capital value of your fund may be eroded completely, especially if you draw out more income than the fund is making in investment returns each year.Your fund will continue to be exposed to investment risk.You will be responsible for your own investments.
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