Insurance

Retirement Options

When you decide to take your pension benefits, either at normal retirement age or earlier, you have a number of options as to how and when you may draw these benefits from your pension arrangements.

If your pension fund is made up of one or a mixture of the following: 

  •  occupational pension plan
  • executive pension plan
  • personal pension plan
  • retirement annuity plan

you will have an accumulated fund and a choice of how you take your retirement income from the following options.

Annuity

In exchange for your accumulated pension fund your pension company will offer you a pre-set level of income, guaranteed for the rest of your life, and spouse if selected. However, it is usually better to shop around the annuity market to compare the income offered.

This is especially relevant if you live with diabetes, as you may be able to benefit from a special type of annuity, which offers a higher level of income than conventional annuities as the income is adjusted to reflect your lifestyle, state of health and life expectancy.

Flexible retirement – ‘A-Day’ to remember

Pensions are among the most tax-efficient and effective ways to save for your retirement, but using your pension appropriately to ensure you can retire when you want and have sufficient income in retirement to meet your financial needs is often a complicated business. Professional financial advice is often needed to ensure that all options are explored and understood. Changes to pension taxation have occurred that may require action to avoid additional tax payments.


‘A-Day’ which occurred on 6 April 2006, saw the Government bring in a new simplified set of rules, effectively shelving the eight previous tax frameworks for pensions. The changes were designed to make life easier for retirement savers, creating greater choice in how and when pension benefits are taken.
Simplification ought to take some of the mystery out of pensions, but with the new flexibility come new dilemmas for retirement savers. For this reason, you should seek expert advice.