Monday, 6 April 2015

Monday, 6 April 2015

Pensions D Day

Pensions – today is THE day, 6th April, pension freedom.  But what will people do??

Most I suspect will opt for pension drawdown – but if you take this route, you will be taking two big gambles.

First, how long do you think you will live? Second, how much income can you afford to take from your pot? Get either of those wrong, and you could easily run out of money before you die.

In answer to the first question, life expectancy once you've reached the age of 65 is currently 83 for men in England and Wales, and 86 for women. But the danger - in pension terms - is that they may well live very much longer. That is why deciding on the second issue - the rate at which you can afford to deplete your pension pot - is so important.

The chart below shows how quickly you can use up your money.

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