In order to provide our members with access to a retirement income service, we have established an arrangement with Retirement Solutions (UK) Ltd. Investing for income, buying an annuity or both, Retirement Solutions can help you find the product that’s right for you. Police Mutual receives no financial recompense for providing this introduction.
Pension Options at 55
From April 2015 you will have complete freedom to access your pension pot. If you are aged 55 or over you could access your pension in one of four ways
- Take a guaranteed income for life
You get paid a set amount every month for the rest of your life so you know exactly how much you will get and when.
- Take a guaranteed income for a fixed number of years.
This allows you to keep your options open without being locked into a lifetime annuity. When the term ends you get a guaranteed amount back and you are free to shop around again for a new pension product or take your remaining pension pot as cash.
- Flexible Access
Take a regular income or lump sums as and when you need them. There are no limits and you have complete control and flexibility for taking income.
- Take it all in cash
TAKE UP TO 25% TAX-FREE the rest is taxed at your marginal tax rate.
Other things to consider
Your Health and Lifestyle
If you’ve been diagnosed with an illness, smoke, or have other health problems that could reduce your life expectancy, you might be able to get a higher retirement income. This is sometimes known as an enhanced annuity.
Normally 25% (one quarter) of your pension pot can be taken tax free.
The remaining 75% of your fund, no matter how you take it, is taxable as earned income.
Taking all your money at once may mean you enter a higher rate tax bracket.
What happens to your pension if you die
Under the new rules, passing away either side of your 75th birthday could be the difference between a tax-free inheritance and a 45 per cent tax charge for your nearest and dearest.
There’s a good chance, then, that you will live beyond age 75, which means tax planning will be an important consideration for your heirs
The advantages of getting financial help
Choosing the right retirement income product – it’s a big decision
If you’re retiring soon, here at Retirement Solutions, we will discuss what you really want from your pension, and help you choose the best options to achieve that.
Retirement Solutions (UK) Limited is authorised and regulated by the Financial Conduct Authority.
Call us on 0800 043 6701 or complete the form below.