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Alternatively secured pension (ASPs) have only been available since 6 April 2006. Prior to then, everyone had to use their pension savings to buy an annuity by age 75.
An ASP is a form of income drawdown. Instead of buying an annuity at age 75, an individual can continue to invest their pension savings and draw an income from their fund within laid down limits.
The minimum that must be drawn as an income from the fund is 55 per cent of an amount calculated by applying the funds available to a table produced by the Government Actuaries Department (GAD). The maximum is 90 per cent. The GAD table is based on the level of single-life lifetime annuity rates for a person of the same sex and aged 75. No allowance is made in the annuity rate used for any level of annual pension increases. The maximum amount must be recalculated every new pension year. The reassessment continues to be made by reference to an annuity at age 75, irrespective of what actual age you have reached.