RETIREMENT MENU
Minimum age 55
(Note: different rules apply to Final Salary/Defined Benefit Pensions and some other schemes)
Cash please
You can have it all as cash but only 25% of it tax-free. You will be taxed on whatever else you take out in the same way as if you had earned it in that Tax Year.
Income please Option 1: You can still get an income guaranteed for life (Annuity -see further
notes below)
Option 2: If you have health issues you may be entitled to a higher guaranteed income for life (Enhanced Annuity)
Option 3: Draw an income from your pension fund itself (Drawdown)
Option 4: Use a guaranteed fund to protect your investment but still be able to take an income (Guarantees). State Pension please The State Pension is increasing but the State Pension age is also going please up. To find out when you will receive your State Pension go to www.gov.uk/calculate-state-pension.
“Side Dishes”
You may have other sources of income to help in retirement. This might be investment income, or rental income from an investment property or income from letting out one or more rooms in your home (Rent-A-Room scheme allows you to earn up to £7500 tax-free).
More on Annuities
There are a variety of annuities available. The general concept is that you use all or some of your pension fund to buy a guaranteed income for life or for a specified period. The older you are, the more income you will get for your money. The guaranteed income can be for the person with the pension and a spouse or partner – to go on for as long as the last survivor is alive. The annuity can provide a level income or an increasing income. There are also annuities which are linked to investments so they can go up or down.
More exotic dishes
The pension rules are different for other types of pensions. If yours is not a personal pension, do feel free to contact us for guidance.
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