CHOOSING THE RIGHT INCOME IN RETIREMENT
How to Get the Best Retirement Income from Your Pension Plan.
Many people who have taken out personal pension plans over the years assume that their plan automatically starts paying their pension at retirement. However, this is not the case. Your personal pension provides an accumulated fund of money called a pension fund. This fund can be used in two ways:
- Part of the fund can be taken as a tax-free cash lump sum (the maximum amount is usually 25% of the total fund)
- The remainder must be used to provide your pension (your retirement income)
This pension may be provided through an insurance product called an annuity. Remember that an annuity is paid for life - be it twenty years or only two weeks. It may also be provided through an Income Drawdown Plan.
Just as Banks and Building Societies compete for customers with savings accounts which offer different rates of return, so the various insurance companies offer different annuity rates. But annuity rates vary much more than ordinary interest rates. Unless you take every opportunity now to find the best annuity, you could end up with a lower pension for the rest of your life. We can be relied on to help you make the right choices. It is important that you receive the best advice. The kind of lifestyle you can enjoy in retirement will depend on it.