Retirement
Income boost for drawdown pensioners
Drawdown pensioners can increase the amount of income they can take from their pot after the GAD rate for August was set at 2.75%, up a quarter of a per cent on July.
Standard Life said the yield rise will boost the income a 65-year-old can take from their drawdown pot by 3.5% compared to July. For a 65-year-old, with a typical £150,000 pot, this could unlock another £360 income this year.
Head of income solutions Alastair Black said: “Drawdown is all about flexibility. A higher income limit gives more flexibility to dial income up or down to meet changing needs, so the rising yield is great news for drawdown users.
“It’s not about always taking the maximum income allowed, it’s about having the flexibility to take more income when it’s needed and reduce it down again when it isn’t. The more room drawdown users, and their advisers, have to adapt to changing circumstances the better.”
He said next month’s higher yield could “be the catalyst” to trigger income reviews to lock-in a higher limit.
Black added: “And the government’s plans to kick-start an early review to get drawdown rates back to reality signals more good news in the pipeline for drawdown users.”
How life insurance can benefit your health and wellbeing over the decades
Sponsored by Post Office