You can access your pension after your 55th birthday as long as it is from a UK source. How you take your pension will depend on the type of pension scheme your money is invested in. The Pension House can advise you of the options available and guide you to the option that most suits your needs.
At the time of taking your pension you can choose to take some of it as a cash lump sum that is tax free. This is generally 25% of the pension fund; however the amount does vary between different types of schemes. The Pension House will advise you of the maximum amount available to you from your schemes.
Once you have decided how much cash to take you then need to decide what to do with the balance. There are a number of options:
- Occupational Pension or Final Salary: The rules of each scheme will
determine how the pension benefits can be taken. Some are more flexible than others and Final Salary pensions usually offer very valuable benefits. It may be in your best interest to take the pension from source on the terms offered. The Pension House can engage with your scheme Trustees on your behalf and explain the benefits to you and any flexibility within the scheme and then advise you if it’s possible to improve on the terms by using an alternative arrangement. Contact Us
- Lifetime Annuity: Swap your pension fund for a guaranteed income for life – The Pension House can Shop for the best annuity for you on the open market Skip straight to Shop for Annuity. For more information about annuities go to What is an annuity. If you take medication or have a health issue you may qualify for an Enhanced Annuity. Skip to Enhanced Annuity
- Flexi Access Drawdown: The Income is taken from your pension fund as and when you require it. Your pension fund remains invested. The Pension House are Independent Financial Advisers that specialise in pensions and have access to all the drawdown product providers, selecting from the market the plan that best fits with your needs. We can explain how the drawdown concept works and guide you through the options available within a drawdown plan. We will advise you of the optimum basis to set up the plan to suit your needs and circumstances and explain all the risks. Skip to income from pension
- Phased Retirement and Uncrystallised Fund Pension Lump Sum (UFPLS): Your income is phased in over time; that part of your pension that has not yet been drawn will remain invested. The Pension House can explain how the phased retirement concept works and guide you through the options available to you. We will advise of the optimum basis to set up the plan to suit your needs and circumstances. Skip to income from a pension
- Fixed Term Annuity or Short Term Annuity:These products can be useful if you do not want to lock into a lifetime annuity, but you also do not wish to take investment risk as with Drawdown or Phased Retirement options above. There are a number of these products on the market; they vary in how they work. It would be important to seek advice if you were considering this option. The Pension House will explain how they work and if any are suitable to meet your needs. Skip to Income or money from pension
As you can see there are many options when considering taking your pension. It is not easy for the ‘lay person’ to determine which option is the best fit for them. Or indeed if any of the options are a good idea for them – as drawing a pension will mean having an income and this could disturb means tested benefits. Also if you are considering taking a pension earlier than expected it will almost certainly mean that you will have less income in retirement.
So do take advice most people need to, it doesn’t have to be expensive and it could save you money in the long run. Call The Pension House without obligation our first telephone consultation is free. If we can’t add any value to your situation we will tell you.
You can also access free guidance form Pension Wise though they won’t tell you which option is best for you.
Taking your pension early will almost certainly mean that you will have less income in retirement it is usually only suitable for a very limited number of people and circumstances.