A particular situation where the deceased has reached pension age but has chosen not to buy an annuity that will provide their pension. Instead, they decide to 'draw' a certain level of income from the retirement fund with a view to buying an annuity at a later date.
Also referred to as pension fund withdrawal. This allows investors to delay buying an annuity and to take an income direct from their pension fund at retirement. Only advisable for pensioners with funds of at least £100,000 or other income.
Under this system, people with personal pensions can take money from their personal pension fund instead of using the fund to buy an annuity.