In a company pension scheme, specifically the money purchase scheme, to provide you pension on your retirement the fund that you as the employee and your employer have raised will be normally used to buy annuity. Annuity is a regular income; you will receive it annually.
But what if you are not yet interested in buying annuity, then you should decide on having unsecured pension for the time being. Also known as income drawdown or income withdrawal lets you obtain income from your fund which continues to be invested in the scheme, until of course you decide to have annuity.
Income drawdown is commonly used by retirees because of the number of advantages if typically offers. Some of these advantages, which are truly hard to resists, are the following:
- Opportunity to have control over your money while it is invested.
- Income flexibility. In this advantage, you can vary the period of time when will you take your profits; it can range from monthly to yearly. Even the amount you receive can either between minimum and maximum limits.
- Opportunity to choose your own death benefits. Not just confined to the normal options that annuity offers as death benefits.