Options at Retirement
The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.
Assuming you are eligible you will get a State Pension. Depending on when you were born and your gender, state pensions become available from age 60 to 68. Your eligibility is also linked to your NI contributions. Over the years successive governments have tinkered with the pension’s regime – so you may be eligible for the basic state pension plus add-ons from some of the following:
- Graduated Pensions
- State Earnings Related Pension (SERPS)
- State Second Pension (S2P)
To find out what you are eligible for our advisers will help you obtain a forecast.
It is rare for someone to be with the same employer for the whole of their working life, chances are that you have had several jobs and as a result have built up pension kitties in several schemes. They could be:
- Employer sponsored final salary schemes, often called defined benefit schemes
- Employer sponsored money purchase schemes known as money purchase schemes
- Group Pensions Plans (GPP)
- Executive Pensions Plans (EPP)
- Personal Pensions Plans, where you have contributed yourself to a private scheme.
- Stakeholder, similar to a Personal Pension, where you and possibly your employer have contributed to a plan, but with limitations.
- An appropriate pension plan (APP) where you may have elected to divert some of your National Insurance Contributions to, often known as contracting out.
There are even some other schemes you may have been a member of.
Our advisers will work with you to ascertain exactly what you have and what is the best approach going forward.
Everyone’s circumstances are different, so a one size fits all approach is not appropriate and in most circumstances you cannot have access to your plans until age 55.
When you are eligible we will consider the options applicable to you and these could include:
- A Traditional Annuity
- A Fixed Term Annuity
- Enhanced Annuity
- Impaired Annuity
- Open Market Options
- Phased Drawdown
- Tax-Free Cash Withdrawal.
Under the new pension flexibility rules there is more scope to take benefits, where the relevant scheme rules allow for this. These pension freedoms may be also available and we are here to help find the most suitable options.
As you can see there are many things to consider and perhaps easy to make the wrong choice without the right guidance.
With many more people living longer, monies accrued in pension arrangements may not be enough to provide an income for life. You may need to consider supplementing your income from your other assets such as your savings, investments and even your property. This makes it so important to seek advice to avoid costly mistakes and to ensure you take advantage of the appropriate tax breaks.