Drawdown drawbacks

As drawdown clients get older they face increasing risk when it comes to maintaining their income levels, MGM Advantage has suggested.

The firm compared income available from a £100,000 pension using a drawdown product and an investment-linked annuity, and found that the annuity would pay the same level of income as the drawdown but with a lower level of risk (or a higher level of income with all else being equal).

The comparisons the firm considered compared clients aged 65, 70 or 75 through to age 85 and 90.

MGM Advantage Pensions Technical Director Andrew Tully explained that as age increased so did the risks of drawdown, but options outside of drawdown do exist.

Tully did stress that whilst investment-linked annuities could help, they would not be for everyone as some people like to retain access to their fund.

To read the full article, click here.

Source: Banking Times