Under the pension freedoms rules introduced in April 2015, once you reach the age of 55, you can now take your entire pension pot as cash in one go if you wish. However, if you do this, you could end up with a large tax Income Tax bill and run out of money in retirement. It’s essential to obtain professional advice before you make any major decisions about how to access your pension pot.
A regular retirement income for the rest of your life
One way to use your pension pot is to buy an annuity. This gives you a regular retirement income – usually for the rest of your life. In most cases, this is a one-off, irreversible decision, so it’s crucial to choose the right type and get the best deal you can.
Make sure you don’t run out of money or face a reduced standard of living
The start of the tax year on 6 April 2017 saw the launch of the Lifetime ISA (LISA), which was announced in the 2016 Budget. This new type of ISA is designed to help you save for a first home or for your retirement at the same time. To be eligible, you have to be aged between 18 and 39 years old (up until your 40th birthday).
As with any new life stage, planning often helps a smooth transition from the old to the new. Preparing properly for anything new requires planning and commitment. Spending time on planning now will ensure you enjoy the retirement you’ve worked hard to achieve.
Investors Planning Associates Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales Reg No. 992112 VAT Reg No. GB 467 243 827 Registered Office: Sterling House, 175 High Street, Rickmansworth, Herts WD3 1AY
The material on the site is the copyright material of Investors Planning Associates. You may not copy, reproduce, republish, disassemble, decompile, reverse engineer, download, post, broadcast, transmit, make available to the public or otherwise use Investors Planning Associates’ content in any way except for your own personal, non-commercial use. This includes but is not limited to all individual fund manager data such as rankings of fund managers and ratings of fund managers. Investors Planning Associates does not accept any liability for your reliance upon, or any errors or omissions. Any other use of Investors Planning Associates’ content requires the prior written permission of Investors Planning Associates.