Retirement Options Guide

The range of retirement income options available to pension holders has never been higher. In 2015, the U.K. government brought ‘Pension Flexibilities’ legislation into effect, which gave individuals freedom to decide how they wish to access their pension benefits. It is important to understand these options

Following the ‘auto enrolment’ legislation that came into effect from 2012, most individuals will rely on their workplace pension to supplement their income through their retirement. Workplace pension schemes are the largest source of pension savings in the UK, with around 83% of full-time employees holding a workplace pension as of 2018. The majority of workplace schemes have transitioned away from the old staple of ‘defined benefit’ (final salary) schemes and now usually employ a ‘defined contribution pension’. With a defined contribution pension, the size of your fund is directly related to your personal and employer’s pension contributions. As defined contribution schemes provide a wider range of pension income options, it is important to understand these options fully before making a decision.

We have tried to provide you with a brief overview/explanation of each of these options below however, for more information we recommend the website, ‘Pension Wise’. Pension wise offers a free and impartial government service that helps you understand the options available for your pension pot. The website is managed by the UK government and even offers a free appointment to help answer your pension queries.

Secured Income Options

Flexible Income Options

If these options seem confusing or complicated, you are not alone. Although not mandatory, many people seek financial advice from a professional financial adviser before taking pension benefits. An adviser can help to explain much of the jargon surrounding pensions, as well as advise you on both pension funding pre-retirement and pension income planning at retirement. In addition to standard retirement planning, an adviser at SIP Wealth Management can also help with more specialist areas of pension advice including:

  • Auto Enrolment
  • Self-Invested Personal Pensions (SIPP)
  • Small Self-Administered Schemes (SSAS)
  • Annuity Purchase
  • Income Drawdown
  • Lifetime Allowance Issues
  • At Retirement Options

If you feel you would like to explore any of these options with us, please fill out an enquiry contact form to find out more.