Drawdown and annuity are the main options people have to draw money from their pension. When drawdown is chosen, people withdraw money from their pension pot, while what’s left remains invested, giving the possibility of the sum increasing or decreasing in value. When an annuity is purchased, people will instead receive a fixed income for life. Read on for close look at these options.
Income drawdown can be advantageous if you wish to have complete control and flexibility on how much money you’ll receive. You can withdraw whatever amount you would like, whenever you want to. The most obvious drawback of this type of pension is that should you take too much money out of your pension pot, you can soon find you’re low on funds.
People purchase an annuity to guarantee an income in retirement, with the amount they receive certain from the beginning. While it offers a measure of certainty, an annuity’s downside is that it typically offers a low income that may not suffice unless it’s unassisted by other sources of revenue.
UK customers seeking retirement planning specialists in Shropshire and Chester can count Hartey Wealth Management for advice. Our expert team of advisors can help you achieve your long-term goals and ensure you have a strategy in place that can provide adequate income for you and your loved ones in retirement. Contact us today for an independent eye on your financial plans for the future.