The factors influencing your pension choices

Posted 6 August 2019 | Pensions


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The value of investments and any income from them can fall as well as rise. You may not get back the amount originally invested.

Planning the best way to draw your pension savings is not straightforward, after all, there’s no ‘one size fits all’ when it comes to retirement.

Life expectancy, the impact of inflation and the choices available at retirement (thanks to the 2015 Pension Freedoms) are all influencing factors in your decision making. You’ll also need to take into account not just your pension savings but any other investments or assets you might have.

Your pension choices
If you’re aged 55 or over and in a defined contribution pension plan from 6 April 2015, you may be able to access your pension savings in  a number of different ways:

• Buy an annuity
• Flexi Access Drawdown
• Uncrystallised Funds Pension Lump Sum (UFPLS)

If you decide not to purchase (or defer the purchase of) an annuity and instead take income using Flexi-access  drawdown or UFPLS, adopting the right investment approach and keeping it regularly under review will be all important.

A question of balance

Balancing the potentially conflicting needs of income production and capital preservation is vital. Equally important is an understanding that personal circumstances will change  throughout your retirement. 

The three 'stages' of retirement

The early years:

 You’re more active and therefore might want flexibility over how you draw your income.

The middle years:

You’re getting slightly  less active and your lifestyle has settled into  a more stable routine, so you’ll need a more stable income level.

The later years:

You may need to  increase your income  to cover, for example, the cost of care.

Explore your options by getting in contact.

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