Drawdown income limits increase to 120% of GAD

January 21st, 2013 by

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Dan Woodruff

Dan Woodruff

Certified Financial Planner & Chartered Wealth Manager at Woodruff Financial Planning
Financial Planning helps you to navigate and anticipate significant life changes. I want to help you to ensure your money is managed wisely to give you the financial security that will fund the future and lifestyle that is important to you.
Dan Woodruff

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balloons drawdown income limits increaseThe 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

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