About Us Join as a Professional
Contact Us
Professionals UK United Kingdom Bedfordshire Belfast Berkshire Birmingham Bristol Buckinghamshire Cambridgeshire Cardiff Cheshire Chester Devon Edinburgh Essex Glasgow Hampshire Hertfordshire Kent Lancashire Leeds Liverpool London Manchester Newcastle Nottingham Oxfordshire Sheffield Surrey Sussex Warwickshire Yorkshire Europe Amsterdam Berlin Brussels Dublin Ireland Madrid Milan Monaco Paris Stockholm Zurich United States Chicago Los Angeles Miami New York San Diego San Francisco San Jose Texas United Arab Emirates Dubai
Categories
  • {{ category.title }}

Please select category on the left first.

If you cannot find what you are looking for or if you have a very specific enquiry, please use our "Send Enquiry" feature.

{{ category | displayCategoryName }}
{{ child.name }}

Showing results in {{ selectedLocation.name }}

Suggestions
  • {{ suggestion.name }}
Categories
  • {{ category.name }}
Suggestions
  • {{ suggestion.name }}
Professionals
Public users
Companies
Articles
Locations
  • {{ locationSuggestion.name }}
There are no results for {{ query }}
Articles & Events Posts
Request a Service
About Us Join as a Professional
Contact Us
Professionals UK United Kingdom Bedfordshire Belfast Berkshire Birmingham Bristol Buckinghamshire Cambridgeshire Cardiff Cheshire Chester Devon Edinburgh Essex Glasgow Hampshire Hertfordshire Kent Lancashire Leeds Liverpool London Manchester Newcastle Nottingham Oxfordshire Sheffield Surrey Sussex Warwickshire Yorkshire Europe Amsterdam Berlin Brussels Dublin Ireland Madrid Milan Monaco Paris Stockholm Zurich United States Chicago Los Angeles Miami New York San Diego San Francisco San Jose Texas United Arab Emirates Dubai
Categories
  • {{ category.title }}

Please select category on the left first.

If you cannot find what you are looking for or if you have a very specific enquiry, please use our "Send Enquiry" feature.

{{ category | displayCategoryName }}
{{ child.name }}

Showing results in {{ selectedLocation.name }}

Suggestions
  • {{ suggestion.name }}
Categories
  • {{ category.name }}
Suggestions
  • {{ suggestion.name }}
Professionals
Public users
Companies
Articles
Locations
  • {{ locationSuggestion.name }}
There are no results for {{ query }}
Articles & Events Posts
Request a Service
31.05.2023

Annuity Vs Drawdown

poster-image
Nadia Khan DipPFS Cert CII (MP), Wren Sterling

Annuity Vs Drawdown

twitter icon

What’s the difference between an annuity and drawdown?

Annuity and drawdown are the two main options for drawing money from your pension. When you purchase an annuity, you usually receive a set income for life. If you choose drawdown, you withdraw money from your pension pot, the remainder stays invested and can go up and down in value.

Advantages of Annuities:

  • A guaranteed income for the rest of your life.
  • Financial certainty and security, the amount you receive regularly will be certain from outset.
  • Option to protect your partner on death by purchasing a joint annuity so your partner carries on receiving a proportion of the payments after your death.
  • Capital protection options are available.

Disadvantages of Annuities:

  • Less flexible, you can’t change the shape of your income or switch provider once you have purchased an annuity.
  • Unlike drawdown, there is no investment value and therefore no pension pot to benefit from growth.
  • As there is no pension pot there is no value to pass to your family or other beneficiaries unless you buy protection at outset and then payments will be determined by how long you live.

Advantages of Drawdown:

  • There is potential for your pension pot to grow more after you reach retirement age.
  • Generally considered more flexible than an annuity, you can change how much you withdraw and can purchase an annuity at a later date if desired.
  • Any proceeds on death are likely to be outside your estate for Inheritance Tax calculation purposes if you have signed a valid nomination of benefits.

Disadvantages of Drawdown:

  • No guarantees, it is your responsibility to ensure your pension pot lasts for the rest of your life
  • Investment risk, the value of your pension pot could go up or down depending on investment performance

 Deciding how you use your pension pot when you reach retirement age can be complicated. The best choice for you depends on various factors.

A financial adviser can explain the different options to you, review your individual situation and help you make the right decision.

  • Drawdown
  • annuities
  • Pension Planning
  • Retirement Options
poster-image
Nadia Khan DipPFS Cert CII (MP) Wren Sterling

I am an Independent Financial and Mortgage Adviser and have worked in Financial Services for over 12 years. During my career I gained experience in assisting both individual and corporate clients.…
Follow us for more articles and posts direct from professionals on      
Facilitator, Facilitation, Meeting Coordination

Meetings: a vital part of running a business or a waste...
Meetings are a necessary but often frustrating part of working. We spend hours and hours a week in meetings, but we…
The Business...
The Business...
Business Consultant

Would you like to promote an article ?

Post articles and opinions on London Professionals to attract new clients and referrals. Feature in newsletters.
Join for free today and upload your articles for new contacts to read and enquire further.