The following Pensions guidance note provides comprehensive and up to date legal information covering:
THIS PRACTICE NOTE APPLIES IN RELATION TO MONEY PURCHASE ARRANGEMENTS FROM 6 APRIL 2015
On 6 April 2015, pension flexibilities were introduced to widen the retirement options available to DC members and other members with 'flexible benefits' (essentially money purchase and/or cash balance benefits). As part of the flexibilities introduced, drawdown became more widely available.
For more information on the pension flexibilities introduced on 6 April 2015, see Practice Note: Pension flexibilities—what is involved?
This Practice Note focuses on the legal regime applicable to drawdown arrangements created on and from 6 April 2015. It also considers the treatment of pre-April 2015 drawdown arrangements on and from that date.
For information on the legal regime that applied to drawdown arrangements before 6 April 2015, see Practice Note: Drawdown between 6 April 2011 and 5 April 2015.
The term ‘drawdown pension’ (sometimes referred to as 'flexible income') replaces the terms ‘unsecured pension’ and ‘alternatively secured pension’ which were used before 6 April 2011.
Drawdown pension refers to the pension payment process which permits members to choose for themselves the annual amount of pension they wish to receive from a pension arrangement. That amount can vary over time, thus avoiding the need to produce a lifetime annuity.
As the drawdown funds remain invested, the value of those funds may grow or fall. This means that,
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