If you die before 75:
If you die before 75:
If you already have enough income to live on – either because you are carrying on working or you have other income from savings or investments to live on – you might be able to delay accessing your pension pot beyond your selected retirement date, or your scheme’s normal retirement date.
Following changes introduced in April 2015 you now have more choice and flexibility than ever before over how and when you can take money from your pension pot. Take your time to understand your options, and get help and advice as what you decide now will affect your retirement income for the rest of your life
Under flexible rules introduced in April 2015 you can now use your pension pot to take out cash as and when you need it. However, there are tax implications and a risk that your money could run out
With flexi-access drawdown, when you come to take your pension you reinvest your pot into funds designed to provide you with a regular retirement income. This income may vary depending on the fund’s performance and it isn’t guaranteed for life.
Under rules introduced in April 2015, once you reach the age of 55, you can now take the whole of your pension pot as cash in one go if you wish. However if you do this, you could end up with a large tax bill and run out of money in retirement. Get advice before you commit.
With a fixed-term annuity you use all or part of your pension pot to buy a retirement income for a set number of years. In contrast, a lifetime annuity pays a retirement income for the rest of your life.
When taking out an annuity you can protect your income and provide extra financial security for your partner or other beneficiary if you die early by adding a ‘guarantee period’. Another way is to add ‘value protection’ which might provide a lump-sum death benefit.
An annuity pays a regular retirement income – usually for life.
If you’re buying a basic lifetime annuity to provide you with a retirement income, one of the key choices you must make is whether to opt for one that provides a fixed retirement income or one that increases each year. (This choice doesn’t apply to investment-linked annuities.)
An investment-linked annuity is a type of lifetime annuity where your retirement income varies to reflect changes in the value of investments such as stocks and shares. So while you can benefit from stock market growth, there’s also a risk that your income could fall. However, all investment-linked annuities guarantee a minimum income.
One way to use your pension pot is to buy an annuity. This gives you a regular retirement income – usually for the rest of your life. In most cases this is a one-off, irreversible decision, so it’s crucial to choose the right type and get the best deal you can. Here’s what you need to consider before making a decision.
An annuity is a product that pays a regular retirement income – usually for life – using money from your pension pot. If you’ve been diagnosed with an illness, or have other health problems that could reduce your life expectancy, you might be able to get a higher retirement income. This is sometimes known as an enhanced annuity.
Income drawdown is a way of using your pension pot to provide you with a regular retirement income by reinvesting it in funds specifically designed and managed for this purpose. The income you get will vary depending on the fund’s performance. It isn’t guaranteed for life.
An annuity is a type of retirement income product that you buy with some or all of your pension pot. It pays a regular retirement income either for life or for a set period.
Basic lifetime annuities