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LV= comments on the GAD rate for June

Press release: 28/05/2015

Ray Chinn, LV= Head of Pensions and Investments said:

“The GAD rate for capped drawdown policies has increased for the first time this year to 2.25%. Following the advent of flexible access drawdown, the GAD rate no longer determines the maximum income savers can take from their pension. However, it retains relevance for those we have seen chose to remain in capped drawdown to prevent a reduction in their future pension contribution limit. In addition, some advisers and customers may still see GAD as a useful measure to avoid a rapid depletion of pension funds. With pension savers now having greater choice as to how they take an income from their pot, we would always encourage retirees to consider all the options available to ensure they make the most of their savings.

“The GAD limit increase means that the amount a 65 year old capped income drawdown client can take from their fund is now £55 per £1,000. This means that a 65 year old client with a £100k fund will be able to take £8,250 from their pension fund if they select to take the maximum amount which is 150% of GAD.”

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