Explaining drawdown at Penguin Wealth

Craig Palfrey: So, my name’s Craig Palfrey, I’m the founder and financial planner at Penguin in town here in Cardiff. We explain drawdown products in as simple terms as possible. I think it actually starts a little but earlier than that we’re talking to the client about their financial freedom date rather than their retirement date, because I think retirement, the landscape has changed massively over the last couple of years, well, the last couple of decades.

I don’t think retirement is as simple as it was, but ultimately, we take them on a journey of where they’re trying to get to. So, someone famous once said, ‘Start with the end in mind.’ That’s what we’re trying to do, help them understand where they want to get to, then how their pension can help facilitate that journey, and ultimately, when we talk about the drawdown, we’re just explaining to them, it’s almost like a bank account.

There are some tax implications, there are some risk implications, depending on what they’re going to do, but ultimately, it is a bank account. They can, nowadays, draw from it, pretty much, however they want depending on their needs, and I would suggest seeking advice. We ask them a whole bunch of questions from the start, before they come into the office, they’re already asked, sort of, fifteen to twenty questions about their current position, their journey, where they want to get to, what their goals are.

Then we’ll ask them another series of questions about risk, what they want to do with the rest of their life, are they going to fully retire, partially retire, planning on helping the kids, how much income do they need, what are their fixed income needs?

There’s not that many specific questions about the drawdown product, because we, kind of, already know the solution is going to be drawdown at that point. Now, with the freedoms and because we know there are no restrictions on the income, I think it applies to anyone.

If a client’s only got £40,000 in the world, if they know it’s not going to make a massive difference to their lifestyle in the future, why not just be tax smart, try and get it all out over the three to four years leading up to retirement and hopefully rely on their other plans. So, yes, I think the limits have been lifted, whether a financial advice firm wants to deal with them at the lower end, that’s a different question, but yes, I don’t think there’s a lower limit anymore.


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