The decisions you make at or near retirement will be among the most important of your life.

Many people today are living much longer, healthier lives so retirement can last 30 years or more. That’s why it’s important to plan ahead to ensure you can enjoy a comfortable standard of living.

There are a number of tax efficient ways of providing income at retirement. The area is complex and choosing the right vehicle requires detailed understanding of your personal circumstances.

Retirement planning falls into two parts;

Pre-Retirement

Choosing the best method of saving for your retirement, taking into consideration your age, affordability, proposed retirement date and any employer pension schemes.

At Retirement

Selecting the best and most suitable way to draw an income from your retirement savings, taking into consideration inflation, taxation, health, and any requirement for dependants benefits.

On 6th April 2015, new pension rules came into force, giving much greater flexibility over how you can use your pension savings and the options you have at retirement.

These changes included the freedom to access the whole of your pension fund, more choice over how you receive tax free cash, changes to death benefits and changes to the contributions you can make.

The first of the new options include flexi-access drawdown, which places no limit on the amount of income you can take from your fund in one go. Unless taken previously you are able to take 25% of your pension pot as a tax free lump sum. The rest is moved into a fund(s) that allow you to take a taxable income at times to suit you. It is important to remember that the amount of flexi-access fund withdrawn to provide you with an income will be taxed at your marginal rate of income tax therefore if you take too much income this may move you into the next tax bracket and result in you paying a higher rate of tax.

The second option is uncrystallised funds pension lump sum (UFPLS). This applies to funds not already in drawdown and allows you to take a one-off payment from your pension or a series of lump sums leaving the remainder of the fund in your pension invested, the first 25% of each UFPLS is tax free, with the balance being subject to tax. UFPLS is not available from any part of your pension that is already in drawdown.

Another option still available is to purchase an annuity. For many people this option will still be the right choice as it gives a guaranteed income for life. Please refer to the annuity comparison section for more information.
Alternatively, you don’t have to choose just one option; you can choose a combination that works for you.

As Independent Financial Advisers we are experts in retirement planning, offering straightforward unbiased advice to help maximize your income.

Retirement Planning

• Retirement Options Advice
• Annuity Comparison Service
• Final Salary Pension
• Public Sector Scheme Review