If you about to retire, most people will generally decide to buy an annuity by age 75. (Unless you choose to use an alternatively secured pension plan.) Many people still buy their annuity from their pension provider without first seeking experienced independent financial advice. At the very least everyone should look into using their open market option to determine the best annuity rate they could get from their pension fund.

These days there are many different options open to you rather than a simple annuity. Although the actual advice would be dependent on your individual circumstances these are some of the choices open to you.

Leave the pension alone

Do not touch the pension and leave it invested to continue to grow tax efficiently until such time as you need the income stream. The later you leave it (unless annuity rates decrease) the larger the income stream you will be able to generate as the fund will hopefully be larger and the annuity provider will not have to pay out for as many years.

Use a phased withdrawal plan

This allows you to gradually withdraw your pension lump sum and buy annuities every few years if you have other sources of income or retire more gradually.

Use an income drawdown plan

Buy a deferred pension plan

Buy a flexible annuity

With all of the above choices or a mixture of any of them should allow everyone to make decisions to suit them at retirement. As always, experienced, fee-based, independent financial advice is essential.

Any questions on retirement options?

If you have any further questions regarding annuities or other retirement options, please don’t hesitate to contact us, either by phone on 01582 839280, or email us.

Or, if you are in the millionaire asset group and are not yet retired, a small business owner, employed or self-employed and need pensions advice, please follow the relevant link.