retirement options

A key area of advice at Leedhams relates to the choices clients have when taking their pension benefits. It is crucial that you take advice at this point as there are now a wide range of options available to you. Every client has different requirements at retirement and we take these into account when helping you to choose the option most suitable for you.

Many people reach the age of 60 or 65 and receive paperwork from their pension provider with a short list of options. The temptation is to select the option which gives them the highest amount of ‘tax free cash’ and greatest level of fixed income.

Whilst this would seem a sensible selection, many do not realise that at this point you can shop around for the highest rates of income on the open market. By failing to do this, many people lock into a far lower amount of annual income than they could have. Once you take this option, your decision cannot be reversed.

The above option is called annuity purchase and involves fixing a set amount of income for life.

flexible retirement

Following changes to pension legislation and product advancement, many other options are now available to clients. Whilst buying an annuity has traditionally been the most popular retirement method, several factors need to be considered before making your final decision:

Are you concerned about leaving benefits to your dependants?
Would you like to vary your pension income to suit your needs?
Would you like the option to keep your money invested and try and increase your fund value?
Do you plan to continue working?
Do you need all of your tax free cash now, or would you like to take it in stages?
Do you need access to your tax free cash now, and leave the income for later?

There are many factors which you would need to consider at retirement, when you will have to choose between annuity purchase, unsecured income, phased retirement or a number of protected annuity alternatives.

At Leedhams, we specialise in advice in this area. We discuss the advantages and disadvantages of each option and recommend the solution which best suits you as an individual.

If you have a pension fund of over £50,000, it is essential that you take advice before making your decision. Making the wrong decision at retirement can be a very costly and often irreversible mistake.