Options at Retirement

The options open to you on retirement can be quite confusing. Those in employers’ pension schemes that provide benefits linked to their earnings are least likely to require advice, although there can be circumstances where it may be worth considering some of the alternatives.

For the vast majority of people, their income will depend on the value of their pension fund at retirement. What many people do not know, however, is that some insurance companies can offer a better income (called an annuity) than others and that they are almost always free to move their funds from one company to another in order to get the best deal.

What’s more, those with larger funds (typically £100,000 or above) can decide not to buy an annuity at all, but draw an income directly from their fund between the ages of 50 and 75. From April 2006, those over 75 have also beeen able to draw an income in this way. By 2010, most people will have to wait until they are 55 to start drawing an income, rather than 50.

One of the most important decisions at retirement will be the form of income you take. The highest income, for any given fund size, is a single life annuity that remains constant throughout life. However, for many people, the spectre of inflation is such that they would rather start with a lower figure and then have their income increase, either by a fixed percentage each year or in line with inflation. However those who are married also need to consider the impact of their death on their spouse and most married people should consider a joint life annuity. This is one that is payable for as long as either person survives. In some cases the income might reduce when the first person dies.

If you would like advice relating to your options at retirement please contact us and we will be pleased to give you a no-obligation, free initial consultation.

Whatever your circumstances Build Your Wealth can help you find the solution – and enjoy a better, more secure financial future.