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#Pension drawdown how to#

on income between £12,501 and £50,000 you’ll pay tax at 20%.

if you have no other income, no tax will be due on the first £12,500.

How much you pay will depend on your total income for the year and your tax rate. The first 25% you take of your pension pot will be tax-free, while the remaining 75% will be subject to Income Tax.

#Pension drawdown how to#

How to manage drawdown funds during retirement.Further withdrawals can then be made as and when you choose, whether you do this in one go, take regular monthly payments, or withdraw lump sum payments as and when you need them. Under rules introduced in April 2015, you can take up to 25% of your pension pot you use for drawdown as tax-free cash – you can take this in one go or each time you move part of your pension into drawdown. If you decide to transfer, it’s important to first check you won’t lose any valuable benefits or be charged high exit fees.

You may be able to do this with your current provider or by transferring your pension to a drawdown provider elsewhere. You can choose to move your pension into drawdown in one go or a little at a time. Pension drawdown is available to those aged 55 or over (increasing to age 57 in 2028) and enables you to take an income from your pension pot while leaving your remaining pension savings invested. Here, we explain exactly how drawdown works and whether it’s right for you. Drawdown is a flexible way of accessing your pension, while allowing your pension fund to keep growing. Pension (or income) drawdown is one of the ways you can use your pension pot to provide a regular income when you reach retirement.