View more on these topics

Drawdown dilemma in retirement age rise

The raising of the minimum retirement age from 50 to 55 could restrict income levels of people using drawdown when the change is introduced.

Although product providers and trustees have the option of phasing in the increase in retirement age between April 2006 and 2010, most are expected simply to change it from the latter date to enable scheme members to take benefits from 50 until the latest possible date.

This would mean that anyone aged under 55 taking drawdown in 2010 would be unable to access further tax-free cash or segments of their pension pots, potentially restricting their income levels and affecting their tax position.

For example, someone aged 50 taking phased drawdown in April 2006 would be 54 in 2010 when the new rules are in force and would be unable to draw further benefits or have additional segments phased in until the following year.

Legal & General head of pensions technical Colin Batchelor says: “One of the most straightforward changes is the change in the retirement date but even that has a complex impact which advisers need to be aware of.”

Recommended

Creeping unrest

Information technology has revolutionised the way that business is carried out all over the world but how has it changed the way that protection IFAs do business with their clients and are advisers happy with the new online environment they find themselves operating within?Some IFAs are rubbing their hands together with glee at the thought […]

How QE is distorting the gilt market

By Mike Riddell The moves in gilts in August were truly exceptional. Volatility in the gilt market (based off 10-year gilt futures) has soared to close to the highest levels seen this millennium, on a par with the eurozone debt crisis of 2011/12 and behind only the global financial crisis of 2008/09. The first distortion […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com