Deciding the best way to get money out of your pension plan can be challenging, there is a lot to consider. This tool enables you to look in depth at the main options available to you and will help you to make an informed choice.
Here are three of the most common options that many people find fit the bill. Once you've read about them, click get started and we'll provide you with a comparison of these 3 main choices based on your own circumstances.
An annuity is a secure income that you buy with your pension fund. It guarantees an amount of income that is normally payable for the rest of your life. Some people are thankful of the security they provide. Others consider buying an annuity a gamble because you may not live long enough to get all of the money back that was used to buy the income in the first place.
Flexi access drawdown was introduced in April 2015 in order to give people more freedom and choice about when & how they withdraw money from their pension plan. Once you reach age 55, essentially you can draw out money as you need it.
From April 2015, it is possible to take the whole of your pension fund out as cash in one go. There are however some tax implications that you should investigate first and you must consider the long term impact of this decision, ie. having little or no money to live on in retirement.
If you smoke you may be able to get a higher level of income from an annuity.
If you have any medical health issues you may be able to get a higher level of income from an annuity.
This will be taken directly from your fund.
You can normally take up to 25% of your pension fund, tax-free. This will reduce the amount you have left to provide an income.