Cash Fund Drawdown

A simple way to withdraw your retirement savings over the short-term. Your money is invested in the low-risk Cash Fund that allows you to take taxable cash withdrawals as often as you wish. Before moving your money across to the plan, you can take up to 25% as tax-free cash.

The Cash Fund Drawdown is designed for customers who wish to deplete their pension over a short period of time. This can be useful when managing your tax matters, but you will need to plan carefully as you may find yourself paying more tax than you anticipated. You will also need an alternative source of income to support you during retirement.

If you wish to make regular withdrawals from your retirement savings, we provide the Income Drawdown Plan which may be more suitable.


Cash Fund Drawdown

Key features:

  • Designed for those who want to deplete their pension fund over a short time
  • Take up to 25% of your pension fund as tax-free cash
  • Ad-hoc taxable cash withdrawals
  • Invests in the Cash Fund
  • Pass on your savings tax-free if you die before age 75.

Eligibilty:

  • Have at least £5,000 to invest after taking your tax-free cash and paying adviser fees
  • Are aged 55 or over (or eligible to take your savings earlier).
richard.jpg

Angela splits ad-hoc pension withdrawals over tax years

Angela has a pension pot of £20,000. She and her husband have a generous retirement income from their employers, so they do not need this pension to live on. Angela decides to take the money as cash, but if she takes it in one go, she will be pushed into paying higher rate tax for that tax year. Instead, she takes out an LFS Cash Fund Drawdown plan and takes her savings over two tax years, so continues to pay basic rate tax.

This example is for illustration only. It should not be taken as advice.


Cash Fund Drawdown

Is it right for me?

The Cash Fund Drawdown may be right for you if you:

  • Want to deplete your savings over a short period of time
  • Wish to take ad-hoc withdrawals not a regular income
  • Do not expect your savings to benefit from any potential stock market growth
  • Are willing to take the risk that your savings could decrease
  • Understand that your income and savings are not guaranteed.

richard.jpg

Angela splits ad-hoc pension withdrawals over tax years

Angela has a pension pot of £20,000. She and her husband have a generous retirement income from their employers, so they do not need this pension to live on. Angela decides to take the money as cash, but if she takes it in one go, she will be pushed into paying higher rate tax for that tax year. Instead, she takes out an LFS Cash Fund Drawdown plan and takes her savings over two tax years, so continues to pay basic rate tax.

This example is for illustration only. It should not be taken as advice.


Cash Fund Drawdown

richard.jpg

Angela splits ad-hoc pension withdrawals over tax years

Angela has a pension pot of £20,000. She and her husband have a generous retirement income from their employers, so they do not need this pension to live on. Angela decides to take the money as cash, but if she takes it in one go, she will be pushed into paying higher rate tax for that tax year. Instead, she takes out an LFS Cash Fund Drawdown plan and takes her savings over two tax years, so continues to pay basic rate tax.

This example is for illustration only. It should not be taken as advice.


Ready to apply?

If you are investing £50,000 or more (after tax-free cash is taken), you cannot apply directly to LFS for this plan; you can only apply through a financial adviser. They will help you decide whether the plan is right for your personal circumstances. They will also help you through the application process. They may charge for their time.
Find a financial adviser

Find a financial adviser

You can find an FCA authorised financial adviser at www.unbiased.co.uk or by calling 0330 1000 755, or you can visit the YourMoneyAdviser website at www.findanadviser.org and key in your location to find an adviser near to you.

If you are investing less than £50,000 (after tax-free cash is taken), we strongly recommend that you seek advice from a financial adviser, but you can invest directly through LFS. Call us on 0345 055 0606 for more information.

Use Pension Wise

Use Pension Wise

Pension Wise is a government service that offers people approaching retirement free, impartial guidance about how to make best use of their pension savings.

www.pensionwise.gov.uk 
030 0330 1001

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