New Income Drawdown rules will reduce the maximum level of income available.
New rules limiting the maximum level of income which can be taken from Income Drawdown plans, which were introduced in the first emergency Budget in 2010, come into force on 6th June 2011.
In line with the Finance Act 2011 all new Income Drawdown plans, or regular reviews on existing arrangements taking place on or after 6th June 2011, will be subject to new rates.
Under the new rules the maximum income which can be taken from Income Drawdown plans will be reduced.
For many people with Income Drawdown plans, especially those who have been taking the maximum possible income there could be a significant reduction in the level of pension that can be paid in the future, compared to what was available under the old rules.
For those entering Income Drawdown for the first time on or after 6th June the new rules will apply and a lower income will be available than under the old rules.
For those people who were already have an Income Drawdown plan the new income limits will only affect them at their next review, which under old rules were conducted at five yearly intervals. Under the new rules reviews will have to take place every three years.
New Income Drawdown plans will automatically be subject to three yearly reviews.