…….. and the world is looking like a scary place, as we continue moving through uncharted territory. However, there are opportunities to be taken whilst remembering the basics of financial planning – including protecting your assets, minimising tax and aiming for growth – do not change a lot. Bookmark on Delicious Digg this post Recommend [...]
Pensions
Annuity or Drawdown? Which Pension for your Retirement? What are Your Pension options?
The pension options open to you on retirement can be quite confusing. Those in employers’ pension schemes that provide a pension linked to their earnings are least likely to require annuity or pension advice, although there can be circumstances where it may be worth considering alternative pension or annuity schemes.
For the vast majority of people, their pension income will depend on the value of their pension fund at retirement. What many people do not know, however, is that some insurance companies can offer a better pension income (called an annuity) than others and that they are almost always free to move their pension funds from one pension scheme or pension company to another in order to get the best annuity deal.
What’s more, those with larger pension funds (typically £100,000 or above) can decide not to buy an annuity at all, but drawdown an income directly from their pension scheme between the ages of 55 and 77. This retirement income is riskier than an annuity but can be convenient for those that want tax free cash but can wait for their pension income and or simply wish to continue to invest their pensions for growth for a little bit longer.
One of the most important pension income annuity decisions at retirement will be the form of income you take. The highest pension income, for any given fund size, is a single life annuity that guarantees a level pension income for life. However, for many people, the spectre of inflation is such that they would rather start with a lower pension annuity and then have their pension income increase, either by a fixed percentage each year or in line with inflation. However those who are married also need to consider the impact of their death on their annuity and their spouse. Most married people should consider a joint life annuity pension income. This is a pension income that is guaranteed to be paid for as long as both the husband and the wife live.
If you would like advice relating to your options at retirement please contact us and we will be pleased to give you a no-obligation, free initial consultation.
Whatever your circumstances Build Your Wealth can help you find the solution – and enjoy a better, more secure financial future.
