Pensioners are being urged to look at the 'big picture' before deciding when they withdraw their pension and how much they should take out
Martin Lewis has dished out his latest advice for pensioners who want to withdraw money. And he is warning them of a 'tax trap'.
Martin explained: "Now the big thing to understand when it comes to taking your money out of your pension, and we're not talking here defined benefit schemes where you're getting 20% of your salary for the rest of your life, we're talking when you've got a pot of money built up. A lot of what's worth thinking about is tax.
He added: "I want all of you now to imagine, picture it, nice and tasty a giant Swiss roll - you have your giant Swiss roll, now most of a jam Swiss roll is of course sponge and you've got the luxury jam bit in the middle. A drawdown is essentially a way of getting a pension income after retirement while still allowing the pension fund to still potentially grow as part of an investment. Meanwhile, an annuity is something that is purchased with some or all of your pension pot which then allows you to be paid an income for either the rest of your life or for an agreed amount of years.
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