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Autumn Statement: Gov't restores 120% GAD rate for drawdown
by William Robins on Dec 05, 2012 at 13:10
The income limit on capped drawdown arrangements will be increased from 100% to 120%, restoring the 20% uplift, chancellor George Osborne has announced.
Those in capped drawdown will now be able to take income at 120% of GAD rather than 100%,
Before 2010 reforms took effect individuals could take 120% of the income level set by GAD. This was reduced to 100% in order to prevent investors from depleting their savings too quickly.
Only people who could secure a £20,000 annual income could drawdown an unlimited amount.
In recent months MPs have come under mounting pressure from retirees hit by cuts of up to 50% in their income as the GAD rate has tracked annuity rates downward.
In November New Model Adviser® revealed the government was considering relaxing the GAD limits in the Autumn Statement.
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