Income drawdown allows you to take variable withdrawals directly from your pension fund, so the amount and frequency of your withdrawal can change from time to time, to suit your circumstances. You may, for example, decide to take more funds to enjoy the early years of retirement, knowing that your income will likely reduce in later life or take no income at all if this is not needed. 

Other features of income drawdown include:

• You can elect to take no income in a particular year or take more if you so wish.
• You can ‘phase in’ the start of benefits: larger funds will enable you to take a series of tax free cash sums before drawing a pension income.
• If you die, the fund can provide a pension for your surviving spouse or civil partner, or pay a cash sum to any beneficiary tax free. There is no longer any compulsion to have to purchase an annuity and therefore, it will always be possible to leave a significant legacy to your beneficiaries.

However, when considering taking income drawdown from your pension fund, you need to be aware of the following issues:

• 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.
• 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.

The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.