Hmrc Income Drawdown Pension Gad Tables - Must Read For Investors

By Author: mark harris
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If you are currently investing in Income Drawdown please ensure you use the correct HMRC Income Drawdown pension GAD tables

The income drawdown pension table you use depends on when the reference period for the income drawdown pension or unsecured pension commenced and, for those aged 75 or over, when the income drawdown pension year or, before 6 April 2011, alternatively secured pension year started.

If you have a question about how to use the GAD tables contact HM Revenue & Customs via the Pensions Helpline on Tel 0845 600 2622.

The following pointers will showcase, when should you use pension drawdown GAD table.

You must use the 2011 tables when calculating the basis amount:

• For reference periods beginning on or after 6 June 2011

• On a recalculation if there has been an annuity purchase, additional fund designation or pension sharing order effective on or after 6 June 2011

• For income drawdown pension years after the member or dependant has reached their 75th birthday beginning on or after 6 June 2011

• For income drawdown pension years for members ...
... or dependants who have reached their 76th birthday beginning on or after 6 April 2011

When you must use the 2006 income drawdown GAD table

You must use the 2006 tables when calculating the basis amount:

• For reference periods for unsecured pensions beginning before 6 April 2011

• For alternatively secured pension years beginning before 6 April 2011

• On a recalculation if there has been an annuity purchase, additional fund designation or pension sharing order effective before 6 April 2011

When you can use either the 2006 or the 2011 income drawdown GAD tables

You may use either the 2006 tables or the 2011 tables when calculating the basis amount:

• For reference periods beginning after 5 April 2011 but before 6 June 2011

• On a recalculation if there has been an annuity purchase, additional fund designation or pension sharing order effective after 5 April 2011 but before 6 June 2011

• For income drawdown pension years after the member or dependant has reached their 75th birthday beginning after 5 April 2011 but before 6 June 2011

Few Features of Income Drawdown:

- Pensioners can comfortably take 25% Tax free lump sum form the age of 55, as per the QROPS rules and regulations.

- Pensioners can receive and take income between 0% and 100% of the rate as prescribed by the Government Actuaries Department. For more detailed and accurate determination of interest rates, you are encouraged to consult with an expert financial planner who is knowledgeable and experienced.

- The income which you can withdraw from your pension fund can be varied, so as to suit your requirements and needs. Hence, if any need arises, you can even withdraw 100 of the pension funds.

- Every three years, the maximum income is reviewed and recalculated, based on the current market equations.

- The income is never guaranteed. Hence, if you are able to empty the whole pension funds by means of error in investment or fraud, then you may end up with nothing in your bank account. Hence, the name unsecured pension funds.

You can view the Income Drawdown GAD tables by visiting the following HMRC website page www.hmrc.gov.uk/pensionSchemes/gad-tables.