Minimum pension limits set to revert to normal levels
In response to the COVID-19 pandemic and the subsequent impact on global economies and financial markets, the Government reduced the minimum pension drawdown rate for account based and transition to retirement pensions by 50% for the 2019/2020 and 2020/2021 financial years. This reduction was subsequently extended to the 2021/2022 and 2022/2023 financial years.
After four years of potentially reduced withdrawals, the minimum drawdown is set to revert to normal levels from 1 July 2023 for the 2022/2023 and subsequent financial years. With no announcement in the recent budget, it is safe to say that the minimum drawdown will not be extended any further, in the absence of any significant economic shocks in the next month or so.
The minimum drawdown rates for 2022/2023 and subsequent financial years will therefore be:
(based on account balance as at 30 June of the previous financial year)
|65 - 74||5%|
|75 - 79||6%|
|80 - 84||7%|
|85 - 89||9%|
|90 - 94||11%|
|95 and more||14%|
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