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After spending a number of years planning carefully for your retirement it is essential that you are fully aware of the options open to you, at your selected retirement age, with regards to your accumulated pension fund. The rules around how you can access your pension benefits have become a lot more flexible in a lot of cases and, while this increases the choice available, it makes obtaining advice about the most appropriate route to pursue more important than ever before.

People are living longer so it is essential that you make the right decision to ensure your pension fund supports you for the rest of your life. Although the increased flexibility around how you can access your pension fund can look very attractive, if the pension fund gets spent too quickly, this could leave you with a huge dilemma financially.

It is also important to be aware of the tax implications of taking money from your pension; while some of the fund can be taken tax free, the remainder of what you receive will be subject to tax.

The Alan Boswell Group Difference

ABG Difference

We aim to build long-term relationships between our clients and our qualified, independent, financial advisers. Our advisers will take the time to get to know you and your plans for retirement, making sure we understand which option suits you the best and ensure that you get the most from your retirement savings.

Further information

The options available in terms of how you receive your pension benefits vary amongst different types of pension scheme. Our financial advisers can confirm the options available to you, depending on the type of pension you have. The options may include:

  • Leaving your pension untouched until you need access to the money. In the meantime, the fund will have the potential to continue growing.
  • Taking up to 25% of the fund tax-free.
  • Using some or all of your pension to buy an ‘annuity’, which provides an income for the rest of your life.
  • Receiving income payments from your pension fund, known as ‘drawdown’. The remaining money in the fund will have the potential to continue growing.
  • Taking some or all of your pension fund as a lump sum. 25% of this will be tax-free (unless the tax-free cash has already been received).

The minimum age to take the benefits is usually 55.

Getting financial advice about which option to choose is extremely important, particularly if considering taking lump sums from your pension fund. The more that is taken from your pension, the less there will be to last you for the rest of your life.

The value of an investment and any income from it can go down as well as up and you might not get back the original amount invested. The past is not a guide to the future.

The value of tax benefits depends on your individual circumstances and the laws concerning these can change.

FAQs

  • The minimum age to take the benefits is usually 55. 

  • Up to 25% of the fund can usually be taken tax- free. Anything else you receive will be subject to tax. This applies whether you receive you pension as a regular income or in the form of lump sums.

  • This will depend on how you have chosen to receive your benefits in retirement.

    • If you are receiving an income from an annuity, there are options available where an income can continue to be paid to a spouse or partner.
    • If you are taking an income and/or lumps sums from your pension fund, the remainder of the fund can be left to your dependants.

    We can help you agree on the most suitable option at retirement and we will explain what will happen to the pension when you die.

  • With a lot of pensions, you have the flexibility to take some or all of your benefits at any time from ages 55 (57 in 2028). We can look at the pension arrangements you have in place and confirm the options available to you, making sure the recommended solution is suitable for your circumstances.

Get in touch

Adam Revell
Adam Revell

Senior Financial Planner

Adam began his working life in financial services at Norwich Union (as it was back in 1997), where he worked as a Life & Pensions…

tony-robinson
Tony Robinson

Senior Financial Planner

Having completed an economics degree at Manchester University, Tony joined the Co-Operative Insurance Society working in the unit trust department at their head office. He…

Neil Marsden
Neil Marsden

Chartered Financial Planner

Neil started his career in financial services with Aviva in 2003, before joining Alan Boswell & Company Ltd in 2006. As an independent financial adviser,…