Your pension savings, your future options
Your pension savings, your future options
Why you should consider modernising your pension
As well as giving you greater freedom over how you access your savings, there are several other benefits when modernising your pension:If your pension plan does not offer all four of these options, then you should think about switching it.
What else do you need to think about?
Another consideration is tax. Regardless of whether you stick with your current pension or switch to a modern one, your income - other than the first 25% of a partial or whole lump sum- is subject to your highest rate of tax. Seeking professional advice can help you access your savings in a tax-efficient manner.
There is certainly, plenty to consider and it is wise to regularly explore your current and potential retirement routes.
Thanks to pension freedoms introduced in 2015, savers over 55 have a wide range of options when it comes to drawing from your savings, and this brings opportunities although it's also easier to make a mistake.
There are now essentially four main ways for you to access your pension savings:
1. Buy an annuity which guarantees an income, typically for the rest of your life but in some cases for a fixed period
The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
Information contained in this article concerning taxation and related matters are based on Openwork's understanding of the present law and current legislation.
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