Drawdown income limits increase to 120% of GADJanuary 21st, 2013 by Dan Woodruff
Latest posts by Dan Woodruff (see all)
- How auto enrolment postponement can save you money - July 18, 2014
- Flexible pensions – How to decide your retirement options - July 11, 2014
- What to do with an inheritance – investment advice - June 30, 2014
The Government has announced a relaxation in the capped drawdown limits, and this is due to take place from March 26th 2013. From this date the drawdown income limits increase to 120% of the GAD rates.
What this means is that after that date, if your drawdown income was recently reviewed, you can probably increase the income you take from the fund by 20%. Previously, the Government reduced the income payable from 120% of the GAD rate to 100%, meaning that at drawdown reviews income rates were dropping. Many income levels also dropped due to other factors too. See our previous article on drawdown pensions issues from the Autumn Statement.
If you currently have your drawdown income set via 100% GAD, you can increase the income to 120% of the current rate after the end of your drawdown year.
Example drawdown income limits increase
Say your drawdown plan started on 1st May 2012. If you were entitled to income of £1,000 per month from that date, from 1st May 2013 you can increase this to £1,200 per month. This will be reassessed at your next drawdown income review, likely to be on 1st May 2015.
Photo credit: Flickr>jdowns66