Adviser > Individual > Drawdown > Why consider Income Drawdown?
Why consider Income Drawdown?
How does an Income Drawdown plan compare with a Personal Pension?
An income drawdown plan is in fact a personal pension! The only difference is that a drawdown plan has the additional facility to hold crystallised money (after tax-free cash is taken).
This facility may come at an extra cost and if so your client is not intending to use drawdown in the short term it is essential to select a plan which doesn’t implement the additional charges until drawdown is activated.
For more information on Scottish Life’s income drawdown plan – Income Release, please visit www.scottishlife.co.uk/incomerelease.
What factors to consider?
It is important to help your clients choose the right retirement option that best suits their individual needs.
In order to help your clients do this there are a number of questions that you need to ask your clients:
- Does your client want to take a guaranteed income or a flexible income?
- If taking income withdrawal, the amount of income that should be taken, the amount of risk the fund should be exposed to and when to buy an annuity?
- Does your client want to provide retirement benefits for a spouse/dependant?
- Does your client have additional assets capable of providing an income?
- Is the plan in line with your client's attitude to risk?
Please note that this is not a complete list of questions and you should ensure that any recommendations you make take into account your individual client's requirements and adheres to your own compliance requirements.
Our guide on At retirement options and Comparison of retirement benefit options both highlight the advantages and disadvantages of a comprehensive list of retirement options, allowing you to help your clients come to a decision by discussing and assessing how each retirement option would fit in with your individual client’s financial objectives.
For more information, have a look at our Income Drawdown leaflet on The Advice Process.
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