Setting Up A Plan

Setting Up A Plan

If you decide drawdown is for you, you then have to decide how and where to invest the money. Your attitude to risk, your income requirements and your longer term requirements for any residual value will all help dictate what types of funds are most suitable for you. This portfolio should then be kept under regular review so that, if markets do move against you, you know early enough to make changes – perhaps reduce your income requirements or change your portfolio.

You can then keep your income drawdown plan for as long as you need it. This might mean you live off it forever, leaving any residual value that plan may have to your beneficiaries. Or it may mean that later in life you switch some of all of your money into an annuity, thereby securing at least some of your income for life. 

In other words, you are not locked into drawdown. You can change your mind and switch out again at any time, albeit you do need to be aware that the value of your fund at this point may be lower than the value you started with.

In terms of tax, drawdown rules align with those of the other retirement options available. That means:

You can take up to 25% of your fund value tax free (and you have the choice whether to take this as a single payment or as a series of smaller amounts) 

Any additional income or irregular withdrawals will then be taxed at your marginal rate of income tax for the tax year in which you receive the money.

Further Information

There is no doubt that income drawdown can be a complicated area of financial planning and one where a bit of professional help can prevent you making some potentially costly mistakes. At A&J Wealth, we have both the experience of the market and of the investment options availbale to help you avoid these mistakes and set yourself up for the comfortable retirement you deserve.

Consequently, if this is an area of interest for you, or you are simply looking to ask questions about it, please do not hesitate to get in touch.

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A&J Wealth Management Ltd


Bigfrith Lane

Cookham Dean



01628 480200

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