Options at Retirement

Depending on the size of your total pension pot, your circumstances, objectives and risk profile, there are now many options available to you at retirement.

For further detailed information on these options please contact us or download one of the free guides.

Tax-Free Cash

On retirement you will normally be given the option of taking a tax-free lump sum (also known as “Pension Commencement Lump Sum”). Tax-free cash is, as the name suggests, totally tax free. You can normally take up to 25% of your pension fund as tax-free cash (this must be done before age 75) and use this money as you wish.


Annuities are the simplest retirement option. They offer a secure, taxable income which is payable for the rest of your lifetime. Once set up an annuity can't normally be changed, so it is extremely important that you make the right choices.

Under no circumstances should you simply accept the first annuity you're offered.

Most people are unaware that they can shop around for the best rate to suit their personal circumstances. In some cases we have helped clients obtain up to 30% more than originally offered.

Annuities have a number of important and valuable options that allow you to tailor the income received. The most important options are listed below.

Each additional option you select will reduce the annuity payments you will receive. Thus, the maximum annuity possible would be obtained by selecting a single life, level annuity, having no guarantee period. We would generally recommend that, at least, a 5-year guaranteed period is selected as the costs involved in doing so are minimal compared to the potential benefits.

Contact us to obtain a FREE annuity quote based on your personal circumstances.

Fixed Term Annuities

Fixed-term annuities pay a secure income for an agreed term, of 5 or 10 years for example (or until age 75), with a guaranteed sum paid at the end of the fixed term. This can then be used to buy another annuity or for another retirement income solution.

By taking out a fixed-term annuity, in preference to a lifetime annuity, you may be able to lock into a potentially higher annuity rate in your later years.

Not only will age increase the annuity rate, but your circumstances, such as health and marital status, may also change during your fixed-term period. These changes will then be taken into account when deciding what action to take once your fixed-term annuity matures. Of course there is a risk in delaying annuitisation as annuity rates may go down in the future. This must be balanced against the additional flexibility that fixed-term annuities provide.

Contact us to obtain a FREE fixed term annuity quote based on your personal circumstances.

Enhanced / Impaired Life Annuities

You may be able to obtain a higher income if you qualify for an ‘Enhanced Annuity’ or an ‘Impaired Life Annuity’ based on your lifestyle and medical history.

Relevant health problems might include, for example, cancer, chronic asthma, diabetes, heart attack, high blood pressure, kidney failure, multiple sclerosis or stroke.

You might be able to get an enhanced annuity if you are overweight, or smoke regularly.

If you, or your spouse (in the case of a joint life annuity), can answer ‘Yes’ to any of the following questions, then you could qualify for an Enhanced/Impaired Life annuity:

Contact us to obtain a FREE enhanced/impaired life annuity quote based on your personal circumstances.

Investment Linked Annuities

Investment Linked Annuities are designed to give you the opportunity to obtain an income that increases during your retirement. Unlike conventional annuities, they are linked to an underlying investment fund so they contain an element of risk.


Under a Drawdown policy, the pension fund which you have built up would remain invested. It is a flexible option which may be considered for larger pension funds and allows you to receive an income directly from your fund, leaving the remainder invested. It is only available up until age 75.

Phased Retirement

Phased Retirement allows you to take the benefits of your pension in stages over time, either by setting up an annuity or by moving money into income drawdown. This would normally only be suitable for people who have a considerable pension fund, usually 150,000 or over.

Alternatively Secured Pension (ASP)

ASP is essentially a type of income drawdown after the age of 75. This means if you choose not to buy an annuity before the age of 75, you can start or continue to draw an income directly from your pension fund.

The maximum income limit for ASP is approximately 90% of the annuity that could be purchased on the open market at age 75. The minimum is 55%. These limits are reviewed each year, based on the actual value of the fund and an assumed age of 75.

If you don't want to go into ASP you must buy an annuity by age 75.


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