For many people retirement is a gradual process, slowly reducing the hours that you work until the day comes when you finally fully retire. As your circumstances change the money that you want to take out of your pension pot and how you take it out of your pension pot can change.
These days there are a number of different options open to you, which can provide you with the blend of guaranteed and flexible income that you need to match your circumstances. Your options at retirement can include:
- Leaving your money in your pension pot and taking an income from it. Any money left in your pension pot remains invested. You can take a quarter of your pension pot tax-free, but then any other withdrawals will be taxed.
- Taking the whole amount as a single lump sum. A quarter of your pension pot can usually be taken tax-free, but the rest will be taxed.
- Getting a regular income for as long as you live (also known as an annuity). A quarter of your pension pot can usually be taken tax-free, but the regular income will be taxed.
In order to find out about all of the options that are available and to find the blend that works for you, speak to your NFU Mutual Financial Adviser who will review your situation and recommend what it is best for you.