The GAD rate is set to remain at 3 per cent next month before its countdown to terminus following announcements made in the Budget.

From April next year there will no longer be restrictions on how individuals over-55 can access their pension pots, terminating the GAD rate in the process.

In the interim until next April, individuals invested in drawdown will be able to withdraw 150 per cent GAD instead of the previous 120 per cent GAD.

The 3 per cent level means the average 65 year-old with £100,000 invested will now have their annual income cap raised to £8,850 from the previous £7,080, My Pension Expert said.

My Pension Expert spokesperson Scott Mullen said the increased levels of flexibility on offer to retirees’ post Budget is “great news”.

“However, we would advise that anyone looking to enter a drawdown contract seeks independent individual advice,” he said.

“That way a discussion can be held as to whether the drawdown is the right option and if it is how much can be afforded to be withdrawn from a pension pot, either as a lump sum or as income.”

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