Retirement

Make the most of your free time

You can choose to take income from your pension fund from age 55. You can usually take a tax-free cash lump sum, normally up to a maximum of 25%. You may be able to take the remainder of your fund as cash, but this would be taxed as income. As of April 6th 2015 you are able to take the full pension fund as a cash sum subject to tax. Professional advice should be sort regarding the proposed changes.


Accessing pension benefits early may impact on levels of retirement income and your entitlement to certain means tested benefits.
Accessing pension benefits is not suitable for everyone. You should seek advice to understand your options at retirement
Levels and bases of and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor
The Financial Conduct Authority does not regulate taxation advice.
The value of your investment can go down as well as up and you may not get back the full amount invested
Retirement options

Open Market

Many people are unaware that they have the right to shop around for a different annuity provider,

to provide them a pension income for their retirement. By shopping around, you could get a better annuity rate for your pension fund. This can make a significant difference to your retirement income.

So exercise your right today, be different and get a higher income by shopping around

Annuities

An Annuity converts your pension fund into a pension income which will be paid to you for either the rest of your life or a fixed term

When you are approaching retirement, your pension provider will write to you with details about your pension fund, and how you can use your pension fund to buy an annuity.

The Guaranteed Pension Annuity (our conventional annuity) guarantees to pay you a regular income for life. When you purchase your annuity you’ll have the flexibility to choose whether your income stays the same throughout retirement, goes up each year by a fixed amount, or matches yearly changes in inflation by being linked to the Retail Price index

You may also include a 5 or 10 year guarantee or have the pension continue to your spouse should you die early

Impaired Health

Do you take tablets or suffer from

Blood Pressure, Cholesterol, Diabetes, Asthma, Breathing Problems, Heart Problems, Cancer, Multiple Sclerosis or something more serious or have you smoked in the last 10 years. Any of these can increase your income in retirement

With Profits

The With Profits Annuity combines the payment of an income for life with the potential for growth as well as some protection from inflation.

Your fund will be invested in the insurance companies With Profits fund.

You are asked to set the Assumed Bonus Rate (ABR/BAR) level for a With Profits Pension Annuity. Effectively, you are being asked what bonus do you expect to be declared from the With Profit fund at the end of the year. The normal parameters are between 0% and 5%.

Your income will be linked to the performance and subsequent bonuses declared by the With Profit fund. If the declared bonus rate is lower than expected you may suffer erosion of the fund. We would recommend this type of investment be reviewed on an annual basis

Flexi-access Drawdown

Flexi-access drawdown is a pension product that lets you access your pension savings whenever you need to, while reinvesting your remaining funds in a way that’s specially designed to provide an ongoing retirement income.

Since April 2015, all new drawdown products are built to offer flexi-access drawdown. Flexi-access drawdown allows you to withdraw as much or as little retirement income as you wish while choosing how the remainder of your fund is invested. As part of the wide-ranging 2015 pension reforms, which allow those nearing retirement to gain greater control over their pensions, flexi-access drawdown is available from your 55th birthday

The disadvantages of flexi-access drawdown

Like all investments, there is risk associated with flexi-access drawdown.
By withdrawing lump sums of your pension, there is a chance that your retirement fund could run out sooner than if it were left in a more stable fund such as a lifetime annuity.

The value of investments can rise and fall and there is no guarantee as to how your funds will perform.

Once you take cash above your 25% tax-free allowance you’ll then become subject to the money purchase annual allowance (MPAA) of £4,000. This means that you can only contribute £4,000 per year, instead of £40,000.

Accessing pension benefits early may impact on levels of retirement income and your entitlement to certain means-tested benefits.

Accessing pension benefits is not suitable for everyone. You should seek advice to understand your options at retirement.

Levels and bases of and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor.

The Financial Conduct Authority does not regulate taxation advice.

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