Risks associated with investment growth, mortality cross-subsidies and levels of withdrawal.
If the income you withdraw is higher than the plan's investment growth (after charges) the plan's value could reduce. If you withdraw a high level of income, you may not be able to continue taking that level of income for a long period if investment growth is low during that time. If you continue to take a high level of income over a long period of time you could greatly reduce the amount you will have left to buy your pension.
People who live for longer than expected after buying a pension will benefit from what are called 'mortality cross-subsidies'. This means that people who live longer than average benefit from those people who die earlier than average. Therefore, if you delay buying a pension you could lose the benefit of these cross-subsidies.
If you take a high level of income early in the term of the plan, this can reduce the income available for you and your dependants at a later date.
