When approaching retirement and thinking about going into income drawdown it is important to take independent financial advice.. If you take an annuity young (especially in early retirement) income may be significantly lower than if you went into Drawdown and took the annuity later. You must balance risk and reward as with all investment decisions. Income from drawdown is at the mercy of fund performance so it is normally best if you have other forms of income. Take advice!

 

Income Drawdown

Annuities normally provide a 25% lump sum and a retirement income. Annuity providers compete on rates meaning that the best annuity quotes may provide 40% more than your pension provider is offering. Annuity Tables and calculators can help you get the best annuity. UK Annuity advice can ensure you are comparing like with like, and choosing the right type of annuity ie Immediate Vesting Personal Pension Plan (IVPPP), Compulsory Purchase Annuity (CPA), Purchased Life Annuity (PLA).

 

Annuities

Self Invested Personal Pensions (SIPPS) are pension plans that are self managed by an individual (often with backup from an IFA). They are a tax efficient pension wrapper that can purchase commerical property, overseas property, Life settlement and other investments outside the scope of personal pensions. An online platform is normally used to enable the SIPP holder to buy "their" best SIPP investments. SIPP providers must follow SIPP rules but pension pots can be invested more widely in SIPPS than most other retirement vehicles.

 

SIPPS

Company pension reform means rules are changing how employers must run their company pension schemes. Auto enrolment/Nest are being phased in and mean compulsary employer contributions and that pension plans will need a default fund. The Government is shifting the responsibility for pensions from public funds to the private sector. Company pension plans will need to meet many new criteria. Non-compliance will be the result in penalties and fines.

 

Auto Enrolment

Pension fund performance depends on the growth of the funds and the amount of charges coming out. When looking at a pension transfer a financial adviser will review a forecast of what your funds should be at retirement age against like for like forecasts from other providers on the open market. Defined benefits and guarantees often mean a pension calculation of this type is irrelevant as you could be transferring guarenteed retirement income for a more risky proposition.

 

Pension Transfers

Personal pensions are a means of retirement planning where you make pension contributions during your working life to provide you an income in retirement. Pension payments attract tax relief to encourage private retirement planning. Setting up a new pension can be very easy. Get advice from an IFA about the best pension for you and how much you should be contribution. With the state pension age rising, and the black whole in the United Kingdom public coffers it is important to take responsibility for your pension provision.

 

Personal Pensions