Hot Topic – Capped Drawdown – CII CF4, R04, J04, J05, AF3
Written by Jane Alford
Buried deep in the Autumn Statement last year was the announcement that investors in capped drawdown would be able to take 20% more cash from their pension pots.
I read it with some surprise, as I was sure it had reduced by 20% not that long ago…it was one of the things that had changed around the time I was taking R04.
Now I’m planning on tackling AF3 and I’m back to it potentially being 120%. (Currently it’s draft legislation – awaiting consultation).
Exams aside, is it still good news for those that don’t want to buy an annuity when they retire?
There will be divided of opinion I’m sure – as to whether it’s enough or not enough.
One thing worth considering though – anyone thinking of choosing drawdown as an option now may be better off waiting until the 20% uplift takes effect and those who are already in drawdown may want to find out if their review date can be brought forward.
The CII state that any changes in legislation will not be tested until 3 months after implementation so this could affect anyone taking any of the pensions exams in October.
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