PSI25.2.11 - Flexibility in Pension Provision – Annuity Deferral/Income Drawdown - Phasing the Purchase of Annuities

(This archived guidance relates to HMRC discretionary practice before the 6th April 2006. For current guidance on Registered Pension Schemes see the Registered Pension Schemes Manual)

Once the pension is in payment under income drawdown, the member or survivor may choose to phase the purchase of annuities to secure part of the overall pension. The annuities must be for immediate payment.

Each time that the pension is partially secured by annuity purchase, there must be an immediate recalculation in respect of that part of the pension which is to continue being paid under income drawdown - see PSI25.2.8. The amount of income drawndown must, if necessary, be restricted in accordance with PSI25.2.4 to comply with Inland Revenue limits.