There are a number of options available to you when you come to take your retirement benefits. The main purpose of most pensions is to provide a regular income for life on retirement, however, a proportion of the pension fund can usually be used to provide a tax-free lump sum (known as a pension commencement lump sum). You will normally be able to take up to a quarter of the value of your pension as a tax-free lump sum.

Pensions can provide a regular income in many ways, but the most common is for the accumulated pension fund, less any tax-free lump sum taken, to be used to purchase an annuity from either the existing pension provider or another insurance company.

An annuity is simply an insurance policy that promises to provide you with a regular income for the rest of your life at an agreed rate. It is not possible to cash in an annuity at any time however, as your existing provider may not offer the best rates and it is possible to ’shop around’ to see if another company will offer a higher income*. This is known as the open market option and Skipton Financial Services can provide this for you.

There are a wide variety of different types of annuity available, including those that increase over time or ones that continue to be paid to a husband/ wife/civil partner or dependant on death of the person that purchased the annuity.

In addition to annuities there are specialist products that offer alternative sources of income from your pension fund, such as Income Drawdown or Phased Retirement.

Depending on the type of pension, it is normally possible to take pension benefits from age 50, although this is due to increase to age 55 from 6 April 2010.

Learn more about:

• Annuities
• Income Drawdown

* Up to 35% extra according to the FSA (Source; Comparative Tables Bulletin Number 6, Pensions Annuities Bulletin, FSA October 2002).

 

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Alternatively call:
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Our simple guide will help you find out how Skipton Financial Services could help you plan for retirement.

Work out how much retirement income you may receive from your personal pensions.

To find out more about any of
the services we’ve mentioned
simply:

• Contact your SFS Financial Adviser
• Call a member of our Client
  Help Line on 0800 137 832
• Visit your local Skipton
  Building Society branch to
  arrange an appointment with
  an SFS Adviser

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