14th December 2012
Thousands of income drawdown investors have cause to celebrate but not quite yet. The Chancellor George Osborne has promised to adjust the rules so they can take more from their pension pots. But as our contributing pension journalist John Greenwood mentioned in his analysis this week, it is not yet time to open the champagne – maybe the cava.
George Osborne’s Autumn Statement contained a promise to increase the amount you can take in a year from what is known as a capped drawdown pension. He promised that the amount would increase by 20 per cent. Currently the rate is set at 100 per cent of the GAD rate. (GAD stands for the Government Actuary’s Department, which calculates the measure linked to the yield on a 15-year gilt). It is due to move to 120 per cent.
Some drawdown investors are not affected at all. If you can demonstrate substantial alternative sources of income from certain approved sources such as a company scheme pension, you can opt for flexible drawdown in which you can draw down as much as you want in any year.