Increase in Capped Drawdown Maximum
The government announced in the autumn statement 2012 a welcome reprieve from the reduction of the GAD multiplier implemented approximately two years ago. This, combined with a severe drop in the underlying GAD rates has, in most circumstances, put pressure on the maximum income available from drawdown .
The reprieve comes in the form of a change in the basis of the GAD multiplier from 100% GAD to 120% of GAD. Draft legislation published on the 17 January 2013 supports this change and once finalised will form part of the Finance Act 2013.
The Draft Finance Bill 2013 proposes that the change is effective from the 26th March 2013. As the draft legislation does not impose a drawdown review of existing drawdown arrangement and the increase in the multiplier may be applied at the next pension year anniversary, GPC SIPP have committed to contacting each individual in drawdown currently administered by GPC SIPP at least one month prior to their pension year anniversary to inform them of such a significant change.