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Retirement – What are my choices?

There are important decisions to make whether you are preparing for your retirement, for example, by accruing benefits in a pension or considering withdrawing cash from your pension at retirement for income or capital.  If you want to make provision for your retirement, both stages present you with choices.

Whether you want to build your wealth for retirement or if you are looking to use your pension to provide an income, our Private Banking and Advice Managers can help you make appropriate choices.

Different types of Pension

There are many ways you can save for your retirement and while pensions are the most popular savings option, they are unlikely to be your sole source of income and should therefore be considered as a part of a plan, complemented by other options such as Individual Savings Accounts (ISAs) or property.

State Pension
This is an income provided to you by the Government when you reach state retirement age. The amount of income will depend on your National Insurance Contributions record.

‘Defined Benefit’ Pension
Also known as ‘Final Salary’ Pension, this is a type of Occupational Pension Scheme where an employer provides an employee with an income in retirement.  The level of income may depend on the employee’s salary and the number of years of service.

‘Defined Contribution’ Pension
Also known as ‘Money Purchase’ Pension, this is an alternative Occupational Pension Scheme to ‘Defined Benefit’.  The benefits at retirement are based on the amount of money that has been paid in, how long this money has been invested, the level of charges and investment returns. 

Other pension schemes
These include Personal Pensions, Stakeholder Pensions, Self Invested Personal Pension (SIPP) and Retirement Annuity Contracts and are all types of defined contribution schemes which are flexible, transferable and also have tax benefits.

Funding options at Retirement

There may be a number of ways to meet your income needs in retirement.  We can help you understand these options and advise a way forward based on your personal circumstances.

Here are the principal options post April 2015 that are available to access your pension:

Main features:
  could provide a life changing sum of money.

Benefits:  money could be used to pay off debt, money could be used to fund life’s next chapter.

Disadvantages:  significant tax charges may be applicable to withdrawals, money may run out during lifetime.

Main features:
  could provide a large sum of tax free money.

- remainder of pension may be used for regular guaranteed income.
- possibility in the future to draw down further or pass onto beneficiaries.

Disadvantages: may need to rely on other sources of income or capital to fund desired retirement lifestyle.

Main features:
pays a regular, known level of income - for life or a given period.

- assists with budgeting.
- provides security and reassurance as provider pays however long you live.
- simple to understand.
- able to defer tax, depending on the type of annuity purchased.

  income based on circumstances and annuity rates at the time of purchase - and both can change significantly.

Main features:
  capital and income can be drawn down when required.


- provides flexibility throughout retirement.
- provides control over savings and investments.
- maximises tax benefits and ability to defer tax.

Disadvantages: Money may run out as you carry investment risk and risk of running out of income.

Other retirement considerations

Pension income in retirement could be complemented by a number of different sources which could include:

  • Individual Savings Accounts (ISAs), Pensioner Bonds, Structured Products and other investments such as shares or funds
  • Property which includes  buy to let, second/holiday homes or commercial property
  • Cash

Important information

Past performance is not a guide to future performance. Investors may not receive back the full amount originally invested and the value of investments and the income from them may fall as well as rise. Tax treatment depends on individual circumstances and may be subject to change in the future.


Pensions – Tax advantages
and implications?

Read more about the Government's tax relief offers on pension contributions to encourage people to save for their retirement.

Retirement – What are the
key considerations?

Whatever you want to do when you retire, the better prepared you are, the more rewarding it will be.

Pensions changes 2015
The biggest reforms in pensions in almost a century were announced in the 2014 Budget, giving you more choice.

For access to advice from a Private Banking and Advice Manager, you’ll need at least £250,000 in savings, investments and/or personal pensions and/or a sole annual income of at least £250,000.
Find out more about Eligibility and fees.


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