An Overview of your UK Pension Distribution Options
The retirement journey varies from person to person and depends on your personal priorities and objectives. There simply cannot be a one size fits all approach toward retirement savings and subsequent drawdown options. The changes introduced in April 2015 give individuals aged 55 or over the freedom to access pension funds flexibly in a manner that is most appropriate for individual circumstances. Funds can be distributed in as large or small increments as desired and there is also generally no longer a requirement to begin distributions by age 75. This flexibility raises the importance of personal responsibility in making sure that you plan your drawdown strategy properly to meet your retirement needs and overall financial objectives and do not encounter a situation where you are unable to provide for your ongoing retirement needs.
Due consideration will need to be given to your asset base, your current and future income needs, any outstanding liabilities and any related tax implications. Gaining a good understanding of the options that are available to you and the important factors for consideration will help you make the right choice. You should be sure to take the requisite time needed to make a decision that best satisfies your needs.
Generally, under the new rules, your options include:
(1) Flexi-access Drawdown
(3) Phased Retirement
(4) Full Lump Sum Withdrawal
An overview of each option is provided in the following documents: