Drawdown examples

The table below is based on a male aged 65 attained, total fund £400,000, with £300,000 applied to the drawdown plan after tax-free cash. Starting income before tax is assumed to be £26,280 (maximum GAD limit).

What this vividly illustrates is the considerable deterioration in the fund value and income if you take the maximum income and the fund growth is only 5% per annum. For example, after 10 years your fund value has fallen to just £137,000, from the starting level of £300,000.

Table: Impact of different levels of withdrawal with 5% growth rates

	Fund at end of period	Yearly income (max.)	Fund at end of period
1 to 5 years	£360,000	£26,280	£217,000
6 to 10 years	£429,000	£22,100	£137,000

(illustrations provided by Scottish Widows)

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