how best to access your pension benefits

Make the most of the new freedoms

Whether you're retired or approaching retirement, you will want the maximum benefit that is available for your pension pot. This is a crucial time to receive our expert financial advice as the decisions you make will impact on your quality of life in retirement.

The April 2015 budget saw a significant change to private pensions and there are now many more options so it is imperative you get impartial, expert advice to make the most of the new choices on offer in order to secure a brighter financial future.

Greater pension freedoms

New government legislation changes have shaken up the pension world, with individuals given new freedom to access their defined contribution pension benefits. We can advise you on how and when your pensions should be accessed, as well as how to structure your withdrawals in a tax efficient manner whilst meeting your objectives.

Prior to the pension freedoms which were introduced in April 2015, annuities were the default option for the vast majority of investors in private pensions. Only those with very small pots were able to cash them in, while only those with sizeable pots were able to use the flexible income drawdown.

Today, members of defined contribution pensions can do what they like with their pension once they turn 55. You can take the cash, leave your money invested and draw an income, or stick with a traditional annuity.

These freedoms allow you to generate an income from your pension without surrendering your capital and increase or decrease that income as and when your circumstances change. If you have the money to spare, it will also be easier to leave your loved ones an inheritance.

None of us know what the future holds in store; this means you need to think about the challenges you are likely to face before embarking on a particular journey.

Making the right choices

The new pension freedoms provide a number of options including:

1. Leaving your pension invested and taking the money later when you need it. When you do withdraw cash you typically get 25% of each lump sum you withdraw tax free.

2. Take your tax free entitlement (typically 25% of your pension) as a lump sum tax-free, then buy a flexible income drawdown product. This is a product that keeps the rest invested so it has the potential to grow, but you can access it to take income when needed.

3. Take your tax free entitlement (typically 25% of your pension), then buy an annuity. This gives you a guaranteed income each year for the rest of your life.

4. Cash in your whole pension in one go. With this option, typically only 25% of it is tax-free, the rest is taxed at your marginal rate of income tax..

We're here to help you make the right choices. Contact us for a free no obligation consultation.