As the time approaches to access your pension, the right advice can make a big difference. There is more freedom than ever in how you choose to use your pension pot, but making sure you have a reliable and tax-efficient income throughout your retirement is paramount.
Whether you decide to purchase an annuity, drawdown a percentage of your pension fund or draw your whole pot as a cash lump sum, Macbeth Scott & Co Life and Pensions can explain the tax implications and help find a solution that works for you.
Flexi Access Drawdown
This option was introduced in April 2015 and provides a tax-free cash lump sum (usually up to 25%) from their pension pot, and then, regularly or as and when required, a taxable income without the need to purchase an annuity policy. Your fund continues to grow through investment, and does not tie you down in a contract. Should you die leaving funds in your Drawdown contract, the full amount can be passed to your beneficiaries directly without falling into your Estate.
An annuity is a way of ensuring you have a guaranteed income for the rest of your life, no matter how long you live. It also means your income is protected against inflation, affords little or no investment risk, and can provide an income to other family members after your death. At Macbeth Scott & Co Life and Pensions we take time to find the right annuity for your circumstances in order to maximise your income.
A conventional annuity contract is the standard package that many people purchase with their retirement fund. Additional benefits can be added to the contract such as inflation-linked increases, or spouse’s benefits; but these will incur additional costs which will affect your initial level of income.
Depending on your health and lifestyle you may be able to purchase an enhanced annuity which will give a higher rate of return, indeed contracts may offer up to 30% more income than a standard annuity.
You may also be able to take advantage of the open market option to purchase an annuity. This means you have the freedom to explore the entire market to find a contract which, usually, yields a higher annual return than staying with your existing provider.
The income you receive in an annuity is set for life so it is crucial that you receive the right advice before entering into a contract. The team at Macbeth Scott & Co Life and Pension services has many years of experience in advising clients on annuities. Do get in touch to find out how we can help you today.
Specialist advice from Macbeth Scott & Co Life and Pensions can help you to use your investments to achieve your income requirements in retirement.