About to draw your pension benefits?
If you are planning to retire in the near future, the outcome of the EU referendum has complicated matters.
One of the reasons George Osborne gave for the introduction of his radical pension flexibility reforms in March 2014 was that “the annuities market is currently not working in the best interests of all consumers.” Yet the annuity rates of spring 2014 now look a bargain: by mid-June 2016 typical rates were around 15% lower than when the then Chancellor spoke. Rates have fallen further since, as a result of the Brexit vote driving down bond yields.
If you are at the stage of converting your pension fund into a retirement income, you may feel circumstances are conspiring against you. In fact, the new pension regime has given you more flexibility in how you can draw your benefits. All the pension choices might not be immediately obvious because some pension providers do not offer full flexibility on their older arrangements. If you want to take advantage of more options than are available from your current provider, it is usually a straightforward matter to transfer to a new arrangement with greater flexibility.
Designing the appropriate structure for your retirement income is not usually a DIY task: individual, expert advice is essential to avoid the pitfalls. Choosing the wrong option can create large tax bills or leave you locked into a poor value solution for the rest of your life. That can be a long time spent in regret: the average 65 year-old has at least a one in four chance of reaching the age of 94.
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.
The information in this article does not constitute advice and should be used for informational purposes only. This content has been provided to Helm Godfrey by Taxbriefs.