Call Richard Cook: 07770 575 122

email: richard@theinvestmentandretirementcoach.co.uk

Drawdown pensions – tax year end considerations

Pension-PlanThose of us in Pension Drawdown (and yes, that includes me) should be quite satisfied with the outcome over the last couple of years.

The combination of dividend income and generally positive stock markets mean that we should have been able to take a reasonable level of income and still seen the fund value increase.

However complacency is a very dangerous thing and it is important that we take this opportunity to check out a few things and make sure our planning and review processes are robust.

So here are just three things to think about.

  • CHARGES. Are you confident that you totally understand all the charges involved in running your plan? I have recently come across plans where the total charges were in excess of 2% per annum. Not too much of a problem given recent investment performance but with dividends at around 4% per annum a massive chunk of your income going in fees if there was no capital growth. Don’t be fobbed of with a verbal quote. Ask for a written breakdown, make sure you understand it, and then decide if you are truly getting value for money.
  • CASH FLOW PLANNING. It horrifies me when I see plans which rely on selling funds each month to provide income payments. Again not a problem when things are going well but a massively high risk strategy for those of you who would say you have a low/medium attitude to investment risk. I am always in a position of not having to sell any funds to provide my income for at least three years. Now that’s a low risk strategy
  • TAX PLANNING. On one hand there are very good reasons for extracting as much as you can from your pension plan whilst not getting into a 40% tax bracket. On the other hand, if you have a large enough fund and maximising inheritances is your priority, perhaps you should be spending other money first and suspending pension withdrawals. Just make sure you understand what you are trying to achieve and  that you have the right strategy in place.

So let’s all be grateful for a good couple of years but make sure we keep on top of things and avoid being at risk when the poor years come.

If you would like some general guidance on how to both de-risk and make the most of your plan just text me on 07770 575122 and we can talk.

Finally don’t forget– ITS YOUR MONEY – it really does deserve a little of your time and attention.


This document and our on going services are not personal advice. We'll give you all the help and guidance you need to make your investment and retirement decisions, but we can't advise you. If you're not sure whether you need regulated financial advice we can put you in touch with a suitably qualified and experienced regulated adviser. Because we are not regulated by the Financial Conduct Authority you will not have access to the Financial Ombudsman Service in respect of any complaints. If you use one of the "no advice" on line services to handle investment transactions they will be Regulated and you will have access to the Ombudsman and The Financial Compensation Scheme in respect of their services. The value of investments/pension plans can fall or rise depending on market performance. The Retirement Team and The Investment and Retirement Coach are trading names of Capture Success Ltd Reg No 01825075 Tel 07770575122

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