The Retirement Account

The certainty of an annuity and the flexibility of drawdown in one simple tax-advantaged wrapper

Reinvesting guaranteed income in Pension Drawdown

If the client wants to reduce the level of Guaranteed Income paid out, or suspend it altogether, they can redirect it via the Cash Account into Pension Drawdown. The beauty of The Retirement Account is that all three components are held within the tax-advantaged wrapper, so by controlling the guaranteed income taken from the account you can control your tax liability.

The level of guaranteed income taken can be reduced at will, with any excess diverted into Pension Drawdown. This can save tax, and boost funds available to invest within the tax-advantaged wrapper.

If desired, guaranteed income can be suspended completely, and all of it redirected into Pension Drawdown.

Jeremy is retiring from his job as an Accountant. His pension pot is £100,000 after taking his tax-free cash. He uses £60,000 to buy a Guaranteed Annuity and invests the remainder in Pension Drawdown, all within The Retirement Account.

Jeremy also has a pension from a previous job, but it doesn’t provide quite enough income for him to live on, so he draws £3,000 yearly income from the Guaranteed Annuity in his Retirement Account.

Five years later, at 65, Jeremy’s State Pension begins. He no longer needs £3,000 per year from his Guaranteed Annuity so moves this into Pension Drawdown.

Another five years goes by and Jeremy is now 70. He feels the need for a little more income now, and decides to start taking £3,000 yearly income from the Guaranteed Annuity again, together with a further £2,000 per year from his Pension Drawdown, giving him £5,000 extra income altogether.



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