Pension fund withdrawals

Pension fund withdrawals. Instead of choosing an annuity at retirement, personal pension holders can instead take income withdrawals from their pension fund. This may be advantageous when annuity rates are low. In this situation you would withdraw an income from your fund (subject to certain limits) and delay purchasing your annuity until rates improved. You are allowed to take your tax free lump sum from your fund before starting income withdrawals. You must buy an annuity by age 75.

Before you decide on income withdrawals you should seek advice from a financial adviser who will take account of certain factors including the size of your pension fund, your attitude to risk and your health.

See our guide to pensions and also our pensions overview and our A-Z index

Last Updated: August 2007 © Moneyextra.com

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