Monthly Archives: December 2010

The rules for annuitisation and income drawdown are under review. A new product is to be introduced which will be badged Flexible drawdown, which will allow individuals to drawdown unlimited amounts from their pension savings. To be able to drawdown this unlimited amount from the flexible drawdown individuals will have to demonstrate that they secured the Minimum Income Requirement (MIR) which prevents them at some point in the future falling back on the state. What this means is that they will have to have a minimum level of income from pensions for life.

Flexible drawdown Minimum Income Requirement (MIR)

Here at retirementsolutions.co.uk we asked Jennie Gray, independent financial adviser to explain more about how the Minimum Income Requirement (MIR) will work under the flexible drawdown, Jennie said “From what I have read the Government proposes that the Minimum Income Requirement will probably vary with age, becoming lower as the member gets older. They have also indicated there may be different rules for couples”

If you are over age 55 then you could qualify for a retirement equity release scheme. These retirement equity release schemes can provide you with a tax-free cash lump sum or if you require a regular income. To qualify you need to own your own home either outright or if you have a mortgage then it must be cleared as part of the equity released.

How much can I borrow with a retirement equity release scheme?

With retirement equity release schemes starting from age 55 you can usually borrow a sum of 21% of the property value (as at November 2010). Remember though you need to repay any outstanding mortgage that you may have.

What type of retirement equity release plans are there?

You can release equity with a retirement equity release plan via a Lifetime Mortgage or a Home Reversion scheme. Each has advantages and disadvantages so make sure you check them both out carefully.