This is the maximum percentage of your fund you can draw each year as income. The figure is calculated using GAD (Government Actuary Department) tables which use your age and 15 year gilt yields to calculate the annual income available from your fund. GAD rates vary on a monthly basis so this figure will change.
This is the amount of your pension fund you have chosen to receive as a tax-free cash lump sum when you start your retirement.
This is the remaining fund which will stay invested in your drawdown account, from which you can draw a taxable income.
This is the maximum taxable income you can currently withdraw from your fund each year. You can withdraw any income from zero up to this maximum. Up to age 75 this income limit will be reviewed every three years. After age 75 your income will be recalculated annually.
At retirement you can usually take up to 25% of your pension fund (or the standard lifetime allowance) as a tax-free lump sum.
To be eligible for income drawdown you must be age 55 or over.
This is the current maximum income you can take from drawdown each year, calculated by the Government Actuary Department (GAD). You can take between zero and your GAD maximum.
The underlying GAD maximum depends on gilt yields and can change each month. However once you go into income drawdown, your GAD maximum is set for at least three years, at which point it will be reviewed. Once you reach age 75 the GAD rate is reviewed annually.
What you do with your pension is an important decision. Therefore, we strongly recommend that you fully understand your options. We offer a range of information to help you and independent financial advice if you are still unsure. Alternatively, Pension Wise, the Government’s new pension guidance service, is due to launch shortly providing a free impartial service to help you understand your options at retirement. You will be able to access the service online, over the telephone and face to face. Further details are now available at www.gov.uk/pensionwise.