Withdrawals from your pension fund
A pension drawdown allows personal pension holders to take withdrawals from their pension fund (pension drawdown) instead of being required to buy a pension annuity with the fund remaining invested with an insurance company. This gives the pension holder more control over their pension.
Significant advantages of income drawdown are the ability to take the tax free lump sum of 25% while leaving the pension fund invested and improved death benefits for a spouse or beneficiaries. Although this option may be riskier than taking a pension annuity to begin with, you could save money by reducing your income in some years, thus avoiding higher rate tax liability.
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