When it comes time to start taking benefits from a pension, this doesn’t have to be done all in one go. Pension drawdown enables an individual to take some of the benefits from their pension pot to enable the rest of the pension fund to remain invested. This style of phased retirement can be especially useful to those who aren’t looking to need the full benefits of their pension immediately and so may be able to benefit from the rest of their pension fund remaining invested until further benefits are required.
There are two types of drawdown;
1. Capped – this means that there are limits as to how much you can take out each year.
2. Flexible – this means that you can make unlimited withdrawals from your pot.
There is a lot more to pension drawdown than just the information above and so it’s important that you get financial advice in order to fully understand and benefit from this.