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Income drawdown

Keep growing your pension fund while taking an income

Income drawdown allows you to take an income directly from your pension fund while leaving the remainder invested for potential further growth.

  • It allows you to take control of how and when you receive your retirement income, so you can retire fully or semi-retire
  • You can choose from a range of investments, but remember the performance of the investments will affect the income you receive
  • To apply for income drawdown available through the Aviva Platform Pension Portfolio, talk to your financial adviser - you'll need to make your application through them.

What is income drawdown?

Income drawdown is a way of taking an income from the money you've built up in your pension fund. You can designate some or all of your pension fund to be used to provide your income.

When you move money out of your pension fund this is commonly known as crystallising funds. If you move all of your funds into drawdown at once this is known as single drawdown. If you move your funds in phases over a period of time this is known as phased drawdown.

How does it work?

You can choose to take income from your pension fund from age 55. You can usually take a 25% tax-free cash lump sum of the fund value each time you ‘crystallise’ some of your pension fund into income drawdown.

Your income can be taken using either capped or flexible drawdown:

  • Capped drawdown means the income you can take is subject to maximum limits set by the Government.
  • Flexible drawdown means you’re not restricted by income limits set by the Government. To be eligible for flexible drawdown you must meet a number of rules set by the Government. Speak to your financial adviser to see if you're eligible for flexible drawdown.

Alternatively, you can choose to delay taking an income if you want to and simply take your tax-free cash lump sum. The amount of yearly income you take must be reviewed at least every three years (annually once you reach age 75).

What are the benefits?

  • Income choices. Income drawdown gives you a choice of how to take money from your pension fund, allowing you to take control of how and when you receive an income. This includes the option to take a more tax-efficient retirement income by using your tax-free cash entitlement to pay a regular income, through phased drawdown.
  • Investment choices. Income drawdown offers you a wide selection of investment options, to enable you to tailor your choices to your individual investment needs. You can invest in over 2800 different funds, plus stocks and shares and commercial property if you wish.
  • Tax-efficiency. Aviva's income drawdown allows your money the potential to grow free of UK income and capital gains tax. Corporation tax is paid on dividends received from UK shares.

Please remember tax laws could change in the future.

Things to think about

  • New income drawdown rules offering more flexibility to investors are being introduced by the government in April 2015, so you may wish to discuss these changes with your financial adviser.
  • The performance of the investments and funds you choose will have an impact on the amount of income you receive. If they perform poorly, the level of income may not be sustainable.
  • If you decide at a later date to buy an annuity, you may receive a lower level of income from that annuity.
  • An annuity may be a more suitable option if you want the security of a guaranteed income for the rest of your life.
  • Income drawdown is usually a more expensive option than an annuity.

What are the charges?

  • There may be charges for managing the funds or investments you choose to invest in and your financial adviser is also likely to make a charge to cover the cost of their advice.

Is income drawdown right for you?

Income drawdown from Aviva may be suitable for you if you're aged over 55 and you have a minimum of £30,000 in your pension fund(s).

You must discuss your retirement options and take advice from your financial adviser before taking out income drawdown from Aviva.

Other useful information

How to apply

Find out more about how to apply for income drawdown from Aviva. The first step is to talk it through with your financial adviser to make sure it's the right retirement income option for you. If you don't have an adviser, you can find one in your area at

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