OTHER OPTIONS ON TAKING BENEFITS

Other options available when taking pension benefits can include:-

Temporary Annuities

An Insurer would provide the tax free cash sum as usual, with the remaining fund providing a temporary annuity - a fixed annuity paid for a specified term, usually 5 years. The attraction is that at the end of the term a guaranteed maturity amount is then available to be used to purchase a further temporary annuity or a lifetime annuity. The option enables you to select a known income level (within limits) for a limited period in the knowledge that the guaranteed maturity amount after the initial term is then available to provide future income - keeping your options open.

Other "Third Way" Options

These options are relatively new, designed to combine the attractions of the annuity and the drawdown routes. They aim to provide security of the income level and a guarantee that the fund cannot run out however long you live.

The pension fund remains invested and the provider quotes a level of income they are prepared to guarantee, which can be re-assessed taking account of investment performance so it can increase, but the guarantee ensures that the income level is not reduced. The income level provided effectively becomes locked in at the highest level at each review.

2014 Budget Announcement

The Chancellor announced in the Budget the intention to remove the limits of the maximum withdrawals that can be taken under drawdown plans, so that you will have access to your funds at any time. The changes are due to be effective from April 2015. Only 25% of your fund remains available as a tax free cash sum, with the balance of the fund that is withdrawan being taxable at income tax rates. 

We are happy to discuss details hence please contact us or request our "Guide To Pension Income In Retirement".