Look beyond the default options if you want to start taking income from your pension

Regulators have come up with four ready-made plans for people who want to start taking an income from their pension fund – but you should still seek help before you decide

New regulations on income-drawdown plans should make it easier for savers to make sensible decisions on retirement. The rules, which come into effect on 1 February, are primarily aimed at savers who don’t take financial advice before opting for a drawdown scheme, even though the schemes require some challenging investment decisions.

Income drawdown plans have become the automatic choice for many savers as they reach retirement and need to begin taking an income from their pension fund. But unlike annuities, which were once the most common way to convert savings into income, they don’t pay a guaranteed income for life. Savers must manage their pension funds to keep generating the income they require while ensuring there is enough cash to last them through their retirement.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.