Investment - Articles - LV= comments on April's GAD rate

 “The GAD rate for capped drawdown policies for April has been confirmed as 2%. This means that the amount a 65 year old income drawdown client can take from their fund will be £53 per £1,000. This means that a 65 year old client with a £100k fund will be able to take £7,950 from their pension fund.

 “For some this may appear to be the end of an era, as following the Government’s pension freedom and choice changes, those approaching retirement now have even more choice and control over how they arrange their retirement income. From April, although the GAD rate will no longer generally determine the maximum income savers can take from their pension, it will retain relevance for those remaining in capped drawdown and not falling foul of the lower Money Purchase Annual Allowance limit. In addition some advisers and customers may still see it as a useful benchmark to avoid the early depletion of funds – something which is highly topical following the publication of the FCA’s Retirement Income Study, which acknowledges that the current GAD limit may provide a useful start point in developing a ‘rule of thumb’ around sustainable levels of income in the new retirement landscape.”