Individual Retirement Planning
Many clients reach retirement with a pension or multiple pension policies and unfortunately still accept the option of a pension with their current insurer rather than looking at the many alternative options that are available.
Retirement planning is therefore crucial to ensure clients choose the best option available to them.
Taking your pension from your current insurer may be the right option for some clients as policies may have certain guarantees that enhance the benefits such as a guaranteed minimum pension or guaranteed annuity rates. At Rowlands & Hames we will always start by reviewing your existing policies to make sure you’re not giving up any such financially advantageous guarantees.
The traditional way to take benefits from a pension was to take the tax free cash and buy an annuity which would give you a guaranteed income throughout retirement. The annuity does not however need to be purchased with your existing pension provider. By opting for an ‘open market option’ we would research the market and find the best annuity rate available to a client from a wide range of insurers.
The annuity market offers far more options than a basic annuity however. These include :
- Lifetime annuities
- Single-life and joint-life annuities
- Level and escalating annuities
- Impaired life and enhanced annuities
- Fixed Term Annuities
- Investment linked annuities
Investment linked annuities can be:
- i) with profits
- ii) unit-linked
Other options at Retirement include Income Drawdown, which provides an unsecured income throughout retirement and flexibility of income. Your pension fund will remain invested and your future income will depend on the investment return of your investment portfolio, and for plans established prior to 6th April 2015, the Government Actuarial Department (GAD) rates at the time of a review.
Flexi-access Drawdown was introduced in April 2015 and replaced Capped and Flexible Drawdown which are now no longer available.
Flexi-access Drawdown offers greater flexibility of income and is not restricted by GAD rates.
Phased retirement is a further option allowing a client to stage their retirement in line with their income requirements in a tax efficient manner.