A recent poll of financial advisers in the UK has confirmed that more than half of people are likely to access their UK pension pots through income drawdown. With poor annuity rates, clients are now looking for ways to obtain a better retirement income with greater flexibility which income drawdown provides. Only 11 per cent of advisers said their clients access their retirement income through buying an UK annuity alone.
Given the increased flexibility and tax efficiencies offered by income drawdown, clients may also employ other options to access retirement income prior to accessing their UK pensions. This could include selling less tax efficient investments or shares or funds held in general investment accounts.