![]() These plans were first introduced in 2004 and were an innovative addition to the equity release marketplace, immediately popular with homeowners who were unsure how they felt about receiving a one-time large lump sum. The drawdown plan brought lifetime mortgages to a new level of flexibility, leaving the rigidity of old schemes behind. When some people think of lifetime mortgage plans, they automatically conjure ideas of the lump sum plan and while that plan does still exist and does work well for some homeowners, things have changed quite a bit with the introduction of different plans, including the drawdown. Given the popularity of lifetime mortgages, home reversions, though still useful are not even close to as commonly used as lifetime mortgages. In fact, the most common equity release scheme for quite some time was the home reversion. In years past, equity release schemes were far from flexible. In addition, many homeowners benefit from the functionality of the drawdown lifetime mortgage since they can help to eliminate any negative potential impacts on means-tested benefits. There most noteworthy feature is flexibility, which makes them very attractive to any homeowner who both wants to enjoy the extra cash an equity release can provide them but also has overall concerns related to the effects of interest. We can help you make sense of your options and you can contact us on 01737 233413, Monday to Friday, 9am to 8pm.Drawdown lifetime mortgages are one of, if not the single, most popular form of equity release products currently available. We can provide advice through our Retirement Income Advice Service. If you don't have an adviser, you can find one by visiting or .uk. ![]() ![]() Income drawdown can be a complex area of financial planning, so we’d recommend you take professional financial advice. Who should I talk to about taking out income drawdown? This means that the lump sum or income is added to any other income they may receive and tax is calculated on the total. If you die before the age of 75, the money remaining in your fund can be paid tax-free either as a lump sum or in the form of an income (which can be a regular income or a series of one-off payments) to your beneficiaries/ estate.Īfter the age of 75, the same options are available, but the money is taxable at the marginal rate of the person receiving the income. The performance of your investment and the amount of income you take should be reviewed and managed on a regular basis.If you take too much income you could run out of money.If investment performance is poor it may reduce the amount of income you can take.Your money is invested in funds that include equities and other investments that can fall in value.On your death, any money left in your fund can be paid to your family or your estate.At any time, you can transfer the money in your pension pot to provide a guaranteed income for life.You can use your pension pot to help with any unforeseen expenses.There are no limits on how much income you can take.The rest of your pension pot can remain invested until you’re ready to draw an income.You can take a cash lump sum – up to 25% of which is tax free – without having to take any income.This has obvious attractions, but there are also risks. This means your pension pot remains invested in funds of your choice and you can withdraw however much you want, whenever you want it. An alternative to buying a guaranteed income for life is to consider ‘drawdown’.
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