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Accessing your pension savings is one of the most important financial decisions you’ll ever make and we’d recommend that you seek advice or guidance before making any decisions. As a result, it’s really important to fully understand the potential risks associated with this option. To find out more, see our support section.
Taking a drawdown income will reduce the size of your pension fund. The initial level of income is not guaranteed. There is a real chance that you may need to reduce your drawdown income in the future, in particular if the performance of your investments is lower than expected, or you live to a greater age than originally anticipated when choosing your initial income level.
The investment growth may not be sufficient to maintain the level of income you wish to draw. If you withdraw money at a rate greater than the growth achieved by your investments, your remaining fund will reduce in value. The level of income you take will need to be reviewed if the fund becomes too small - this is more likely the higher the level of income you take.
The income you receive may be lower than the amount you could receive from an annuity, depending on the performance of your investments.
The rules governing how much income you can take directly from your pension fund may change. This could mean that the income you can take from the investment no longer meets your requirements.
For free and impartial government guidance to help you understand what you can do with your pension pot please visit pensionwise.gov.uk