The options of taking retirement benefits have changed and now offer more flexibility and choice than ever before. You can take a cash lump sum, a flexible income stream, a secured guaranteed lifetime income or a mix and match combination of all three options. To arrange a free initial discussion at your home, workplace or our offices contact us today.
Here is our pension lump sum advice to help…
A cash lump sum in three ways:
- Full lump sum
- Partial lump sum
- Small pot lump sum
With each of the above options normally 25% of the pension pot can be taken as tax-free cash and the balance will then be taxed as income.
While this may seem appealing, think carefully about the tax position as taking everything could mean you pay a large amount of income tax on your pension savings. It may even mean higher or additional rate tax becomes payable and the loss of your personal allowance.
Flexible income stream
You can take some of your pension pot(s) as tax free cash (usually up to 25 % of the fund value is tax-free cash) then use the balance to provide a flexible income (taxed as income). This lets you keep your pension invested, offers full flexibility and in the event of your death any funds left can be passed on.
Guaranteed secured lifetime income
You can take some of your pension pot as tax-free cash and use the balance to provide a secured lifetime income.
An annuity provides a guaranteed secured regular retirement income for the rest of your life and your partner or spouse if required. The income paid is usually a fixed amount and can’t normally be adjusted if your needs change over time.
Enhanced or impaired life annuities pay a higher income than standard annuities and are based on a range of both health and lifestyle factors.
It’s important to shop around (open market option) if you choose an annuity, as different providers offer different rates and types of products.
You can also utilise flexi-access drawdown with a secure income feature as this offers control of income withdrawal and pension drawdown plus the added peace of mind of a secure income payable for life that won’t run out.
Mix and match
To meet your individual retirement income needs you may prefer a combination of cash and regular income. Blending options can offer the exact balance of income security, flexibility and access to your pension funds and potential for longer term capital growth.
How you take your pension benefits is really up to you, get it right and it can give you more control and a higher level of income in retirement. You can take flexible pension benefits with one or more providers, so it’s important to consider the range of options available as they all have different features, potential income levels and charges.
Consider timing of accessing your pension benefits. If you’re not ready to decide, or don’t plan to retire any time soon a no obligation pension review can help you understand how retirement is looking!
We will check your contribution levels are in line with your expectations and chart the investment performance and returns against the risk being taken to help you understand what you have and the options open to you helping you to make an informed decision.
Clifford Osborne are Independent Financial Advisors based in Eastbourne, East Sussex, offering Pension Lump Sum Advice. We serve clients in Lewes, Seaford, Bexhill, Hastings, Newhaven, Tunbridge Wells, Brighton, Crowborough & Uckfield. Our financial advisors also offer care planning advice, mortgage advice and equity release advice.
Other pension services we offer include pension in divorce, pension review and pension drawdown.
The value of investments can fall as well as rise and you may get back less than you invest.