The changes to pensions which were introduced in April 2015, means you have various options at retirement. Here is a breakdown to help your decide what to do.
ANNUITIES
A Guaranteed Income for Life – a Lifetime Annuity.
You could be paid a set amount every month for the rest of your life, so you’ll know exactly how much you are getting and when. This option helps you protect against longevity and will ensure your pension/s lasts for the rest of your life.
– Combine the value of all your pension pots
– Take up to 25% tax free lump sum
– Use the rest to provide a guaranteed income for life
– Provide for your spouse or beneficiaries in the event you were to decease
A Fixed Term Annuity – Your Terms, Your Income.
You can decide if you want to take an income or not take an income for a term between 3 and 25 years. This option helps you stay in control of your income if you’re not ready to tie yourself into a lifetime income. At the end of your chosen term, you will receive a Guaranteed Maturity Value (if you have not exhausted your entire fund) which can be used to purchase another Fixed Term Annuity, Lifetime Annuity, Flexi-access Drawdown or take the rest as a taxable lump sum.
– Combine the value of all your pension pots
– Take up to 25% tax free lump sum
– Use the rest to provide an income* or choose not to take an income
– Alternatively, exhaust all of your pension fund over a number of years*
– Provide for your spouse or beneficiaries in the event you were to decease
* your pension may not last for the rest of your life if you take a higher income
DRAWDOWN
Flexible Access – Flexible Drawdown or Partial Pension Encashment (PPE).
The current restrictions for flexible access to your pension pot will be lifted from April 2015 when you can take out what you like when you like. The rest is left invested so it has the potential to grow.
– Take some money tax free
– Leave the rest invested
– Take bits when you need it
– Provide for your spouse or beneficiaries in the event you were to decease
ALTERNATIVELY
Take it all as cash – Full Pension Encashment (FPE)
From April 2015 you’ll be able to take all your pension pot out in cash however much it is. At the moment the amount you can take is capped depending how much you’ve saved and how many pots you have.
– Combine the value of your pension pots
– Take up to 25% tax free
– Get the rest subject to tax
Leave it all for now – Defer your pension.
Keep your money where it is in your pension pot. It’ll give you the time to think about your pension options and you can plan how best to use it to provide for your future. Your pot is left invested so it has the potential to grow.
– Do nothing now
– See how your money could grow
– Decide what to do later
For help with any of your retirement options, please call us on 0800 098 7050. Alternatively, you can provide details on our contact page by completing the online form.
We look forward to assisting you with your retirement soon.