At Retirement

Pensions advice at retirementYou’ve worked hard all your life saving into your pension, now it’s time to draw your pension. We explain things in plain English and work hard to get you the best income to help you enjoy your retirement.

How can I draw my pension income?

You can draw pensions from age 55 and whilst the majority of people do not touch their pensions until they actually retire, the run up to retirement is probably the most important time to get Independent Financial Advice.

The decisions you make on how to draw your pension income will affect your finances for the rest of your life and with many people living into their 80’s and 90s it is crucial that you consider all of the options.

With the recent Pension Freedoms, there is now much more flexibility on how you draw your pension. There wide range of options available including taking it all as a lump sum, buying an annuity, drawdown, fixed term annuities, investment linked annuities and enhanced annuities.

What about Tax?

You can get 25% your pension tax-free, but the remainder of the fund will be subject to income tax in the year that it is drawn.

Whilst drawing all of your pension as a lump sum may sound attractive, in reality this is unlikely to be the best course of action for most people.  Unless your pension pot is very small you will end up losing much of it to income tax if you draw it all in one year and whatever size your pension it could be challenging to make this last over the course of your retirement if the money is just sitting in the bank earning little interest.

Friendly, professional face-to-face advice

With so many options and things to consider deciding when and how to draw your pension income can be very confusing and that is why it is so important to get advice.   When you buy a house you would get expert advice from a surveyor – when considering your retirement options there are experts to help with this too – financial advisers.

As Independent Financial Advisers we review all of the options and we work for you NOT the pension providers. We will spend time together exploring and discussing you, your pension, your overall financial and life plans to make sure we give you the very best advice so that you can be confident you are making the right choices for your future.

Alternative options:

Annuities

An annuity pays a guaranteed income for life and is the most common way to convert a pension plan into an income.  You make choices at outset such as the frequency of payments and whether you build in any death benefits for your spouse and then that is set for the rest of your life. More on annuities.

Drawdown

The other main option for drawing your pension income is known as drawdown.   This is often the preferred route for individuals with higher pension funds (£100,000+ ) where you want to retain greater flexibility than that offered by an annuity.  With drawdown your funds remain invested whilst you can draw an annual income.  You can vary the income drawn within specified rates, whilst your fund has the opportunity to benefit from further investment growth.  There is also greater flexibility on death benefits. More on drawdown.

How Aspect 8 can help

We will review your existing pensions and explain all the options to you so you can feel comfortable with your choices.

To find out more call us on 01273 229120 or fill in your details on our Contact Us page for further information.