In recent months, changes to tax in the United Kingdom will mean that pensioners may no longer be eligible to receive as much income as they have previously through their income drawdown pension scheme. For this reason, many pension companies are urging their clients to act fast and ensure that they lock away their drawdown rates so that they cannot be affected by the upcoming changes.

A number of tax and threshold reductions came into play in April which will affect the amount of pension income that can be drawn upon. The 120 per cent of the offered rate current limit was decreased to 100 per cent which meant that many pensioners could lose the ability to draw on an extra 20 per cent of their income. For a person on an average pension of 30,000 this could mean a loss of over 5000 a year.

Further questions have been raised as to what potential impact the idea of introducing a unisex payment plan could have on male investors. Presently males tend to receive an additional five to ten per cent extra in their pension payments as they tend to earn more over their lifetime. If unisex payments were to be introduced then men could stand to lose up to ten per cent of their pension on top of any other cutbacks.

Pension companies have been urging their clients to lock in their investments since the start of the year to avoid the changes that were implemented on April 6, but unfortunately many people did not realise the severity of the situation and therefore stand to lose access to thousands of dollars as a result.

Individuals could stand to lose even more with recent changes to the pension pay out system through changes to the table which is used to determine the pension pay outs, this is in addition to an increase in the death tax for any lump sum paid on to beneficiaries – this has increased from 35 per cent to 55 per cent.

Find out more about income drawdown