Independent Financial Life Planners Bishop's Stortford: So what happens if I die and I have an income drawdown?

Thursday, 22 August 2013

So what happens if I die and I have an income drawdown?

An income drawdown gives much more flexibility than an annuity, however the money you will receive from this type of pension will be much more unreliable. It is a much higher risk alternative, which would not be suitable for everyone. If your investment performs badly or you take out too much from your income you could potentially deplete the fund.

If you are unsure about this type of pension option then we would advice that you seek advice from an IFA.

• If you pass away your spouse or dependent can buy a lifetime annuity (providing a taxable income) with the remaining pension fund. If the full amount is used there is no lump sum tax charge when the pension pot is passed on.

• Your spouse or dependent can take a taxable income using income drawdown from your pension pot.

• Your spouse or dependent can to into flexible drawdown with the inherited pension pot, if they meet eligibility requirements. Any money drawn from this pot is subject to tax at their personal income rate.

If you would like to find out more about tax relief and tax shelters then you would be best advised to contact an IFA, as they will be able to give you the most up-to-date advice on how to manage your income drawdown, as these are very complicated and depend on how much you have drawn down, your age and personal income.

Next week we will look at some other alternatives to relying on a conventional pension.

What is an annuity?

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE.

No comments:

Post a Comment

IFA Bishop's Stortford

At Enable Independent we know that our clients trust us and rely on our advice to help them to plan a better, more secure financial future. This is a responsibility that we take very seriously especially because we know that many clients have chosen us on the recommendation of friends and family. Each one of our advisers has deep expertise in their area of specialist knowledge and, as a team, we hold some of the highest qualifications available in the financial advice industry.

Our job satisfaction comes from using our skills to find workable, affordable and flexible solutions to meet our clients needs. Whether we are planning for known future funding requirements such as house purchase, school fees or income in retirement - or for the unforeseen such as job loss, long-term illness or early death, our independence from any product provider enables us to view the marketplace impartially. Our training permits us to look beyond a product's marketing hype and select on the basis of its fitness for purpose.