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Retirement Options



There are a number of options available to you when you come to take your retirement benefits. The main purpose of most pensions is to provide a regular income at retirement and for the rest of your life. However, a proportion of the whole pension fund, usually 25%, can be taken as a Tax Free Cash lump sum. If you take a tax-free lump sum it will reduce the regular income you get.

There are a number of ways in which a pension can be used to provide a regular income. The most common way is for the pension fund, less any tax-free lump sum taken, to be used to buy an annuity (pension) from either the existing pension provider or another company. If you choose this option you should be aware that the existing provider may not offer the best rates and it is advisable to 'shop around' to see if another company will offer a higher income. This is known as the open market option.

There are a wide variety of different annuities available. These include those that increase over time or which will continue to be paid to a husband, wife, civil partner or dependant on death of the annuitant (the person that purchased the annuity). Your age and your health can also have a significant influence on the income you may receive.

Our simple to use annuity quotation facility will enable you to compare providers and if you wish you can self select the one that best suits your needs. This can reduce the cost of purchasing an annuity therefore helping those with smaller funds to obtain better value.

You must remember that you cannot cash in an annuity once purchased and depending on a number of factors you may feel that the Annuity Option does not provide you with best value or the flexibility to address your needs. So, what options do you have?

All the options covered
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Here is what some of our
clients have said....
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Hi Andy,

Thank you for the excellent service was not expecting this and could not happen at a better time, told last week of redundancy in April.

Regards J

Hi Richard – I have now had all the money from my pension drawdown into my current account.

I would just like to a HUGE thank you to you and everyone at Pensionlite. From the first phone call to the last everyone has been thoroughly professional, explained each step clearly and, most importantly, just got on with the job and delivered. Rare qualities indeed. More power to you all and thanks again.

M.
London

Dear Andy

Thank you for your speedy assistance in helping me release some cash from my pension. The essential repairs to my property are well under way now and I can look forward without worry to a more comfortable future.

Mrs S.
Tyne & Wear

Dear Ian

My tax free cash arrived in my bank today and in view of my recent difficulties thought I should write and thank you personally for your assistance and reassurance during the process. All of your staff have been very helpful but you have been particularly supportive and explained things in a way I could understand when we first spoke. All the best. I will certainly tell my friends about you.

Bob P.
Milton Keynes

Dear Roy and Andy

I have now received confirmation that my pension transfer has been done and my new plan is in force. Thank you for your assistance in reorganising my pensions. I feel far happier now everything is in one place and that the investments are in lower risk funds. I will be registering with the on line service so I can check my pension values myself on a daily basis and am very pleased with yours and your companies services.

Dave J
Glasgow

Dear Andy

I am writing to thank you for assisting me with my complaint about my old pension policy. My funds have been transferred to my new plan and I have the new policy document. It is reassuring to know that I can check the values on line when I want and that after next year I can begin to take benefits if and when I decide to. The compensation I received has also helped to pay off a few bills so even better.

Thank you once again. I will certainly recommend you to my friends.

Jennifer S
Lincoln

Annuity, Annuity Rate & Retirement Planning

Whether you have made your mind up already or want us to guide you along the way, our expert affiliate retirement consultants can help you. They can provide advice and research on all UK approved options including:

Conventional Annuities

Conventional annuities provide a guaranteed income for life. The income is neither subject to investment risk nor mortality risk. This means that it doesn’t matter what happens to stock markets, house prices or any other investments, and, the income will continue to be paid out, even if you smash the longevity record!!

Investment-Linked Annuities

An investment-linked annuity is similar to a conventional annuity in that it is simply a series of payments made at selected intervals in return for a pension fund. Unlike a conventional annuity, however, the pension funds that you use to buy this type of annuity are invested with the aim of being able to provide you with the potential for a higher level of income. Investment linking can be established using unit-linked funds (UL) or “with profits” funds (WP) for the underlying investment.

Enhanced Rates Annuities

Your smoking habits and any medical condition or conditions, both past and present, can all affect your normal life expectancy. Some annuity providers now take this information into account when setting their annuity rates. In some cases, this can mean substantially higher income levels than those payable from standard conventional annuities.

Flexible Annuities

A small number of providers have developed what have been termed “flexible annuities”. These plans combine a guaranteed taxable income for a limited period with the balance of pension funds remaining invested. Typically this works by your pension funds being transferred to a personal pension plan and the tax-free cash entitlement being paid out to you immediately. Some of the pension fund is then used to buy a 5-year annuity, with the balance remaining invested in the new pension plan. This process can then be repeated every five years.

Phased Retirement

You can arrange most personal pensions as a single plan, or as a cluster of many separate plans, sometimes called ‘segments’. You can use these segments to buy annuities or unsecured pension plans at different times. You must use all the segments to provide a retirement income by the time you reach the age of 75, either via a lifetime annuity or Alternatively Secured Pension. This process is called ‘phased retirement’.




Unsecured Pension
(Income Drawdown or Pension Fund Withdrawal)

Unsecured Pensions are a popular alternative to buying a lifetime annuity. They allow you to take a Tax Free Cash Lump Sum and draw an income from your pension fund while the fund remains invested. The maximum level of income you can draw is about 120% of the level lifetime annuity payable to a single person of your age and sex; and the minimum income you can draw is zero. On the death of the individual in income drawdown, the surviving spouse/partner will have a number of options. They could continue with the income drawdown until they are age 75 or until the time their deceased spouse would have reached age 75, whichever is the sooner. The spouse could purchase a pension annuity or take the whole fund as a tax free lump sum and pay a 35% tax charge.
 
 
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