The principle is to delay the purchase of an annuity until the time is right and in the meantime, take an income directly from the fund. In the instance of income drawdown from the fund, there are limits imposed on the amount that can be withdrawn and when an annuity has to be purchased by. It also gives the client the option of taking their tax free cash at that point. Under present climate of low annuity rates, this method proves to be a beneficial option for many people.

This option is worth considering for those persons with medium to large pension funds (limits can apply). This is a way of releasing some of the capital in the fund to use at the present and defer the buying of an annuity and hence the taking of an income from the fund for a period of time.