Glossary

The world of property investment can sometimes be confusing; our Glossary is full of useful terms to help every investor, whether they are a first time landlord or a seasoned portfolio builder.


D

Drawdown


A method of withdrawing benefits from a UK Registered Pension Scheme, in the form of either income or a lump sum. There are two types of drawdown available through the new pension reforms:

  • Capped Drawdown: A form of making withdrawals from your pension pot, with a limit on the amount of money you can take out from your pension scheme each year. Capped drawdowns have the benefit of being more flexible than annuities, yet restrict the capacity of a full pension withdrawal so as to maintain an element of financial security for the pension-holder.
  • Flexible Drawdown: Unlike capped drawdown, the flexible option allows withdrawals from your pension pot without a limit to the amount that you can take from your scheme each year. Although in previous years there have been conditions placed on who can withdraw their pension, from April 2015 the minimum income requirement will be completely removed so that everyone can get access to their retirement savings at age 55. With a flexi-access drawdown, you can take out 25% of your pension pot out completely tax-free, whilst the remaining 75% of your pension fund are taxable at your marginal income tax rate.