Simplifying drawdown reviews
While the introduction of capped drawdown has enabled individuals to decide how much to withdraw from their pension, subject to annual limits, investors aged 75 and over are required to have a yearly review to ensure sufficient funds remain.
However, this can cause problems for investors who withdraw various amounts from separate pension schemes with different anniversary dates, and then merge the schemes together. This will result in the individual having several reviews each year, one for each section of the overall fund.
Consequently, HM Revenue & Customs (HMRC) decided last April to allow anyone in this position to bring their review dates into line by shortening some of the years.
Now its guidelines will also allow investors to length years in order to align their review dates, making it simpler for individuals aged over 75 to merge their pension years together, as well as minimising any additional review charges.
