Investors who have a pension drawdown scheme which is due to be reviewed in the next few months will be in for a shock if they are taking maximum drawdown. The amount they are able to withdraw is likely to be considerably reduced for the following reasons.
(a) the reduction in the maximum withdrawal from 120% to 100% of the Government Actuaries rate (GAD)
(b) the introduction of new Government Actuarial Tables
(c) Lower gilt rates, the GAD rate is now based on a 2.75% return on gilts down from 4.25% yield earlier this year
(d) recent falls in fund values following the falls in the world stockmarkets
In most cases there will be little which can be done to reduce the hardship of the reduced income but for some investors a change to flexible drawdown or scheme pension may provide a higher level of income