Pre Retirement, put yourself in the picture, ask us to:
- Work out the amount of sustainable income you might receive in retirement from your pensions and investments, and what you need to do if you want to improve the position
- Identify the changes needed once your earned income stops, as your capacity to accept an investment loss alters
- Confirm how your pension fund death benefit will be organised, and suggest any changes if required.
At Retirement, look for the best deals available, ask us to:
- Identify entitlements to safeguarded benefits like guaranteed annuity rates, tax free cash higher than 25% or guaranteed pensions with inflationary increases, and any issues with the Lifetime Allowance
- Compare the options of annuity purchase and flexi access drawdown and arrange the appropriate transactions and income stream
- Monitor progress thereafter with our ongoing service.
What Type of Pension Do You Have
Other than the state pension, there are two main types of pension:
- defined benefit pensions
- defined contribution pensions.
Defined Benefit Pensions
You are most likely to have a defined benefit (DB) pension if you work in the public sector or for a large company. This is a salary-related pension which pays out a secure income for life and increases each year. The pension you get is based on how long you’ve been a part of the scheme and how much you earn.
You might have a final salary type scheme where your pension is based on your pay when you retire or leave the scheme. Alternatively you might have a career-average pension where your pension is based on the average of your pay while you were a member of the scheme.
Defined Contribution Pensions
With this type of scheme you build up a pension pot which you can draw a retirement income from.
The amount that builds up depends on:
- The level of charges you pay
- How well your investment performs, and
- How much you and your employer (if you are employed) pay into the scheme.
Defined contribution (DC) pensions include workplace, personal and stakeholder pension schemes.
The term ‘pension pot’ refers to a DC pension you build up with pension contributions you and/or your employer make.
It is possible that your current pension has valuable benefits that you would lose if you were to transfer out of it, such as additional death benefits, a pension for your partner after you die, a Guaranteed Annuity Rate (GAR) option or a protected tax free lump sum greater than 25%.