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GAD income drawdown

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By Tony Stevens  | Pensions Expert

Updated: 5th April 2019 *

We hear from loads of customers who are looking for information about GAD income drawdown, many of whom are on an older Capped Drawdown plan and are keen to avoid losing the benefits of this pension type by inadvertently exceeding the cap.

So, we’ve put together a comprehensive guide on this very subject, and you’ll find the following topics covered below…

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What is ‘GAD income drawdown and how does it work?  

‘GAD’ stands for the ‘Government Actuary Department’. This organisation sets the maximum allowable amount that you’re allowed to ‘draw down’ from your pension, every year. This figure is referred to as the ‘GAD rate’.

How is the GAD rate calculated?

The income drawdown GAD rate is calculated through a formula tied to yields on FTSE 15-year gilts, and is worked out based on your age. As returns on 15-year gilts fluctuate, this can change over time.

The rate is unisex, and recalculated every year up to the age of 75. Once you turn 75, it’s revisited every year.

How do I calculate the GAD rate for my pension?

That depends on your age, but, as a rule of thumb - the older you are, the higher your rate.

What’s the current GAD rate for me?

It works like this: your age is assigned a number, such as 55, which can be calculated to work out the amount of ‘basic pension’ you can drawdown for every £1,000 in your fund.

So, for example - if your GAD rate was 50, and you had £100,000 in your fund - your ‘basic’ pension would be £5,000 a year.

This figure is then increased by 150%, giving you a total maximum of £7,500 a year.

Where can I find up-to-date pension drawdown GAD rates?

If you want to see the current GAD income drawdown tables, the government publishes them on its guidance page.

The table you need will mainly depend on the reference period for your pension (i.e. the date you started to draw down).

Since GAD rates can fluctuate, speaking to an pensions advisor is recommended over taking rates table information at face value. The experts we work with can offer you bespoke advice based on your needs and circumstances and factor in any forecast rates changes.

Make an enquiry to speak with one of them over the phone today.  

What should I do if I need help calculating the GAD rate on my pension?

There’s a couple of options. Pension Wise is a free and impartial government service that can provide a certain amount of guidance if you have a personal or workplace pension.

If you want a little more ‘hands-on’ help, you could consider speaking to a pensions expert. We work with a range of friendly advisors who can help you to see how much you can take out and, more importantly how much you should take out - based on your unique needs and circumstances. Want to find out more? Get in touch.

Where can I find a GAD pension drawdown calculator?

You can find GAD pension drawdown calculators on many pension providers’ websites financial hubs.

One thing to keep in mind, though, is that GAD pension drawdown calculators can only serve up raw data without context. They do not take your needs and circumstances into account, or flag up incoming rate changes.

This is why speaking to a pensions expert is a better option - they can calculate your GAD rate for you, put this data into perspective and offer bespoke advice for your retirement plans. Make an enquiry to speak with one today.

Still have questions? Speak to a pensions expert

If you have questions and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry here.

Then sit back and let us do all the hard work in finding the pensions expert with the right expertise for your circumstances.  – We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

Updated: 5th April 2019
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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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