Pension rules are changing regularly as regards how and when you can take your pension benefits. Currently the earliest you can take pension benefits is age 55. Because we are now living longer, we need to consider how best to take the benefits to service us for a long retirement. Living longer and the current economic conditions are combining to give us less pension income than in the past. Here too it is important to take advice.
In the past there used to be only one choice – to take the income offered by the pension provider you had saved with. Now there are many more choices:
1. You can shop around for the best income (annuity).
2. You can take your Tax Free Cash and leave the rest invested until later with the option to take an income from the pension fund.
3. And, most recently, there are Fixed Term Annuities. These allow you to take one’s Tax Free Cash and take a guaranteed income for a specified term, with the certainty of a cash sum waiting at the end of the fixed term which you can then use to set up another Fixed Term Annuity or a Lifetime Guaranteed Income. Since the rates on offer for pensions (annuity rates) have been poor and have continued to fall, this approach keeps your options open.
It is important to make the right choices when you take your benefits, as they will affect your income for the rest of your life. We will be pleased to help advise on all the retirement options open to you.
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