The average Briton can expect to live for 19 years after retirement. Are you confident that your retirement savings will sustain for this time?
An estimated 33 per cent of UK retirees fail to explore their options before accepting the default annuity rate offered by their existing pension provider.
The current maximum state pension you can expect to receive if you reach state pension age before 6 April 2016.
My Pension Choices is run in association with the Financial Advisor Network. Our goal is to provide all UK retirees with access to the independent advice and support they need to make the right choices for their retirement.
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Matthew is 65 and preparing to retire. His private pension savings amount to £80,000. He had assumed he would simply buy an annuity from his provider on retirement, but the recent pension reforms prompted him to seek professional guidance. After discussing his options with a local independent advisor, he realises that he is eligible for a considerably higher enhanced annuity rate from a rival provider.
However, he also has the option of keeping his savings invested in low-medium risk bonds to hopefully increase his income over time. He has additional income from property combined with his state pension, so decides to take this route and gradually draw from his pension savings via income drawdown as and when he requires additional funds.
In addition to potentially boosting his income, this deferred drawdown option also protects his pension savings from being lost if and when he dies – as would usually be the case with an annuity. As he is married with two young adult children, ensuring there is a pot of money left behind in this eventuality is a high priority for Matthew.