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Case Study (2)
Mr & Mrs P have combined State and guaranteed pensions of around £25,000 p.a. but these they do not expect to increase dramatically. They will also lose around £8,000 p.a. income on the demise of either of them; so will need a boost in income at that time.
They wish to purchase a holiday home and need to take a lump sum from Mr P’s remaining private pension funds valued at £300,000 to help with the cost of purchase.
Both are in fine health. They have two adult children and four grandchildren.
As they have a secure income already and really only need Mr P’s remaining pension to “top-up” if their Bills start to rise or if one of them dies a Drawdown annuity is ideal for them.
Taking the maximum PCLS of £75,000 and drawing no income, the plan is to review the Drawdown fund every year.
In good years they will take the maximum “income” they can without affecting the fund and save this for future spending. In bad years they plan to leave the fund untouched and live on their existing pensions.
Should we lose either of them the survivor can then draw £8,000 p.a. from the fund (3.6%) to replace the income lost and should we lose both before age 75 then the family can have the £225,000 pension fund subject to taxation.
In the meantime, if Bills rise too fast they can always arrange to draw whatever is needed from the fund to supplement their income, and they do not have to deplete their entire non-pension portfolio to buy the holiday home.
They wish to purchase a holiday home and need to take a lump sum from Mr P’s remaining private pension funds valued at £300,000 to help with the cost of purchase.
Both are in fine health. They have two adult children and four grandchildren.
As they have a secure income already and really only need Mr P’s remaining pension to “top-
Taking the maximum PCLS of £75,000 and drawing no income, the plan is to review the Drawdown fund every year.
In good years they will take the maximum “income” they can without affecting the fund and save this for future spending. In bad years they plan to leave the fund untouched and live on their existing pensions.
Should we lose either of them the survivor can then draw £8,000 p.a. from the fund (3.6%) to replace the income lost and should we lose both before age 75 then the family can have the £225,000 pension fund subject to taxation.
In the meantime, if Bills rise too fast they can always arrange to draw whatever is needed from the fund to supplement their income, and they do not have to deplete their entire non-
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