Killik Explains: How pension drawdown works

Tim Bennett sheds some light on a key choice facing retirees under the pension freedom rules

[richardpiper]

Great video. Very well presented and helpful.

[chrisf]

Thanks, that was a good intro. Very useful :)

[insertnamehere]

Final salary pensions are a bit of a scam in my opinion. You Pay in for example 35 years. You retire and get your lump sum and start taking your pension (normally half your working wage) You die within the year. Immediately the pension is worth (evaporates) to Half. Then your wife lives maybe another 5 years on your half pension and she dies. The Pension dies with her! 35 years of invested money gone!!! The reason they were popular in the past was because most men were dead by 65ish so the fund was always well funded. Now more men (but not all all) live longer the pension funds are whining and employers have mostly closed them all. They worked on the assumption you paid in all your working life but died within a few years of retiring hence keeping the pension pot full of your money for the odd person who lived to 95.

[wernesgruder]

Pensions....what a great the investment companies. 40 to 50 years of payments and probably 70 to 80 year’s of commission payments. How many companies can get a more or less stable income stream from their customers for such a period?

[fredatlas]

Can you take up to 25% tax free in drawdown each tax year or is it just a one off tax free withdrawal

[davidbrooks]

You can see why some people dont both with a pension with all this bullshit.

[RayTheBrassPlayer]

No mention of how fees charged to manage funds further erode the growth of a fund.

[dave]

I would be interested on your thoughts on borrowing money to pay into a company pension scheme example get secured loan of 120k against house then invest 40k/year into pension scheme get 25% tax free plus 40% tax relief + 8% investment return then payback loan with 25% tax free cash

[boyasaka]

Say you have 200k in your pension pot
You retire at 60
And you take 25 percent tax free ( which is 50k) leaving 150k in your pot
Then 3 months later your die

What happens to the 150k in your pot if you are single ??

[Jeffybonbon]

I am a 40% tax payer and I would be interested to see a presentation on only taking the Tax Free cash and leavening the rest as a hedge against IHT

[mrelano]

The cash that feeds the pension over many years is taxed after you earn it then taxed again when you draw it.

[dudeatx]

You're not really explaining or discussing pension drawdown here at all.