InvestAcc - The Retirement Planning Experts

Further reduction in Income Drawdown limits

Tue, 20 Sep 2011 10:13:25 GMT

The gilt yield (used to calculate the maximum income for Capped Drawdown) for September 2011 is at an all time low, meaning that maximum income for new Capped Drawdown cases in October will be squeezed even further. The effect of the new income limits introduced in April 2011, together with historically low gilt yields means that maximum income is around 30% lower now, compared to March 2011 (for a male aged 65).

Many commentators are pointing to Scheme Pensions as an alternative solution, given that they do not directly depend on gilt yields and are specific to each member. InvestAcc will shortly be launching a new SIPP product that includes Scheme Pension. Full details will be available at launch - currently expected October 2011.

As ever, individuals considering pension income options should always consult a suitably qualified financial adviser. InvestAcc Pension Administration Limited do not provide financial advice.