Common sense seems to be creeping in to the pension rules at last.

The proposed changes to the drawdown rules could be life-changing for some.

At the moment anyone that is in, or is considering drawdown (or ‘unsecured pension’ to give it its official name) will know that the rules surrounding the level of income you can take are fairly rigid. You may only take a certain percentage of your pension fund as an income, and this level is reviewed every five years.

However the proposed rule changes will allow those who can prove they have at least £20,000 of annual pension income at the time they apply for the new flexible drawdown option to take any level of income they like from their pension pot. In theory, you could take the whole lot.

Another proposed option is that you could remain in drawdown for the rest of your life, without ever needing to buy an annuity. Again this just makes a lot of sense.

The other option you have for going in to drawdown, which is available to you right now is the option to take no income. This allows you to release your 25% tax free cash without having to draw an income if you do not wish to.

There is a world of options out there when planning for your retirement and the proposed rule changes should make this a lot more flexible for you in the future.

Investor Profile Contact Details

Blog by Jaskarn Pawar

Jaskarn Pawar is an experienced and award winning Chartered and Certified Financial Planner. He advises people all over the UK on financial planning and wealth management issues to help them reach solutions to fit their personal needs. You can contact Jaskarn on 01604 211234 or by e-mail on