Skip to main content

Accessing you Pension – So, what are your options?

If you are 55 or over and have a defined contribution (money purchase) pension plan, you can:

  • Leave your pension pot invested
  • Buy a guaranteed income for life 
  • Take a flexible income from your pension pot
  • Take a cash lump sum from your pension pot
  • Combine one or more of the options above. You can take cash and/or income at different times to suit your needs.

You may be able to access your pot earlier than age 55 if you're unable to continue working because of ill health. It's important to remember that with some options, once you've chosen them, you can't change your mind later.

Shopping around

Allen Tomas & Co can obtain illustrations on the most suitable annuity plan to suit your circumstances, we will always take into account your health in order to potentially enhance the annuity rate. It's always worth checking what's available in the wider market as you may get a better deal than the one offered by your existing pension provider.

Transferring to another provider

Different pension plans offer different options so you may need to transfer your pension plan to another pension provider to access some or all of these options. Depending on the type of pension you have, you may incur charges or miss out on valuable guarantees if you transfer. We recommend you speak to us before taking any action as you may be required by law, or your provider may insist you get financial advice before any transfers can go ahead.

Some things to think about before accessing your pension plan

  • Tax implications - The way you're taxed and how much you have to pay will depend on how you access your pension and your individual circumstances, such as any other sources of income or savings you have, and may be subject to change
  • Sustainability of income - If you take too much money from your pension plan, you may not have enough left to provide you with a sufficient level of income
  • Investment choice - If you're leaving some or all of your pension plan(s) invested, it's important you consider the funds you're invested in to make sure they're still the right choice for you. The value of your pension that remains invested can go down as well as up. Appointing the right Independent Financial Adviser to advise in this area is paramount 
  • Providing for any dependants - If you leave any money in your pension plan, on your death it will usually pass to your beneficiaries free of inheritance tax. If you take money out of your pension plan it forms part of your estate and may become subject to inheritance tax. Taking money out of your pension may mean there isn't enough money left to provide for your dependants should you die before them


Location: st.nicholas court, Dersingham, King's Lynn PE31, UK

Comments

Post a Comment

Popular posts from this blog

Budget 2021 – Small Business Owners

The planned increases to Corporation Tax Rates and what these mean for small business owners. Who will be affected? The corporation tax ‘main rate’ (currently 19%) is scheduled to increase considerably to 25% by April 2023. A new ‘small profits rate’ is also being introduced for business which make less than £50,000 profit a year. The main rate will be applied to businesses making more than £250,000 profit a year, with a ‘tapering’ of the two rates between these amounts.  Those companies under this lower £50,000 threshold will find themselves relatively unaffected by the new measures.  Businesses which find themselves between these rates will arguably be affected worst, having smaller profits to pay the extra tax from. For these companies, particularly which find themselves just over each of the limits announced, or indeed the tapering limits yet to be confirmed; additional tax planning will become an essential exercise going forward. Fortunately, these same companies will hav...
Read more

An update on ISAs

Cash These ISAs are the simplest form, but unfortunately at present paying poor returns and in most cases not keeping pace with inflation. Enjoys Financial Services Compensation Scheme Protection up to £85,000 per provider. The ISA limit for 2017-18 is £20,000. Stocks and shares All or some of the annual ISA allowance can be invested in stocks and shares. This can be done directly in shares of companies or in bonds, or through funds or investment trusts, which are funds that are traded on the stock market. Investors can also use 'passive' investments, which are low cost and track different markets, such as the FTSE 100. The ISA limit for 2017-18 is £20,000. Junior Junior ISAs are for those under the age of 18. Up to £4,128 can be saved into these ISAs in the 2017-18 tax year. At age 18 this money is then converted into an adult ISA, and the child takes control (and can do what they want with the money). The money cannot be withdrawn until age 18, unless the child is te...
Read more

STEP Affiliates

As a firm we are constantly trying to move forward with our standards and professional development. We have aspirations of obtaining Corporate Chartered Adviser’s status early next year and are also working to achieve accreditation from the Society of Later Life Advisers (SOLLA). Another professional accolade we have been working on is becoming Affiliate members of The Society of Trust & Estate Practitioners "STEP" and we are pleased to announce both Michael and Ben are now Affiliate members of STEP. "STEP is the global professional association for practitioners who specialise in family inheritance and succession planning. We work to improve public understanding of the issues families face in this area and promote education and high professional standards among our members."
Post a Comment
Read more