Options at retirement

Releasing Value from your Pension Funds: Options at Retirement

Tait Walker's experienced and well qualified advisers can help you to avoid making expensive mistakes in your retirement planning. Our job is to assist you in making wise financial decisions so that you can live comfortably, without the fear of ever running out of money. We will work with you to create a budget, work out when you can afford to retire, understand your pension options and develop an income source withdrawal strategy to meet your needs.                     

We will recommend a tailored retirement plan, ensuring that you understand all the options including annuities, phased retirement, unsecured ("drawdown") and alternatively secured pensions.

Annuities

An annuity involves you handing over all or part of your pension fund to an insurance company, which agrees to pay you an income for the rest of your life. There are different types of annuity: ones that stay level in payment, ones that increase by a fixed rate or by the Retail Price Index each year, and others where the annuity payments are linked to the performance of underlying actively-managed investment funds.

The annuity can be set up so that all or part of it reverts to your spouse or partner in the event of your death, also so that it is payable for a minimum period of up to 10 years even if you die before that period ends.

If you are in poor health, with a shortened life expectancy, you could choose an enhanced annuity.

Different insurance companies offer different annuity rates, and these change from time to time. We can help to find the best rate for the type of annuity best suited to you.

• Income Drawdown

Income Drawdown is an arrangement that allows you to continue to keep your retirement savings invested and take an income each year, rather than buying an annuity. This can continue until age 75, when you either have to buy an annuity or move into an Alternatively Secured Pension.

The income that can be taken can be varied each year between minimum and maximum levels that are calculated by the Government Actuaries' Department.

• Alternatively Secured Pensions

Alternatively Secured Pensions (ASPs) became available in April 2006. Before then, everyone had to use their pension savings to buy an annuity by the age of 75. ASPs are a form of income drawdown that is relevant only from age 75.

• Phased Retirement

There are a number of strategies available within this approach. For example, you could keep your funds invested in a Personal Pension, and then use part of the fund to buy an annuity or Drawdown plan each year, using the corresponding tax free cash to top up your income for that year. Alternatively, you can move the total funds into a Drawdown facility, converting part of the fund to an annuity each year.

Contact Martin Lebovitch for more information.

Useful Pensions Links to:

www.pensionsadvisoryservice.org.uk

www.fsa.gov.uk

www.hmrc.gov.uk/PENSIONSCHEMES/

www.thepensionservice.gov.uk

www.pensions-ombudsman.org.uk

www.thepensionsregulator.gov.uk

Use the following link for useful information from the Financial Services Authority:

www.moneymadeclear.fsa.gov.uk