Association of Member-Directed Pension Schemes | AMPS

AMPS Curated List of Drawdown Alternatives
Written by Andrew Roberts on 14th Nov 2012 9:40 am 3486

The current list of suggestions submitted by AMPS members and others suggested in the press, as of 14 November 2012:



Drawdown Alternatives



1.Round Up rather than Round Down gilt yield (simple, but won't make a big difference)



2.Increase minimum floor (would require legislative change)



3.Update GAD tables (likely to happen when annuity market matures after gender-neutral rates are brought in)



4.Bring back 20% uplift (unlikely to find favour with Government)



5.Switch to GBP x per GBP 1,000 fund for a member aged x years old (better for younger people, worse for older people)



6.Introduce upwards only reviews (doesn't stop fund running out)



7.Switch investment index e.g. to corporate bond index (might be a better proxy for annuity rates)



8.Switch to scheme specific investment rate (awkward)



9.Remove investment link altogether (simple, but would be radical move away from annuity-linked rates)



10.Switch to individually certified maxima (expensive for member)



11.As above, but as an alternative option to standard rate (could be useful for those with higher investment returns and/or impaired life)



12.Have a single rate which is not age-related or investment-related (very simple, but radical change and disadvantages older people)



13.As above, but with different rate at age 75 to deal with issue above)



14.Have an enhanced rate for funds above a certain limit (i.e. the Andy Bell model)



15.Introduce a carry forward mechanism, so anything undrawn can be caught up.



16.Introduce a three year allowance, which potentially improves on the above as you can daw in advance if you wish.



17.Make Flexible Drawdown more accessible - rather than lowering Minimum Income Requirement perhaps make the income test related to household income rather than member income.



18.As above, but allow flexible drawdown for all people on all but a set amount of drawdown funds i.e. you can draw an unlimited amount provided you have capped drawdown funds of GBP 300,000 (issues with when you conduct that test).


 19.  If at the end fo the pension year there is more in the fund than at the start, allow the excess to be drawn out regardless of the maximum. 


We continue to update this list. Please submit suggestions to if not included on the above list. This list is purely to demonstrate the range of alternatives out there and is not part of an official submission to Government.

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