Your questions answered

Question:

I have a Personal Pension and am considering retiring - do I need to buy an annuity from my pension provider? -S W, Fulwood

Answer:

The simple answer is NO. Your pension plan will offer an Open Market Option which allows you to transfer your pension fund to an alternative provider who offers a better annuity rate. It is also worth bearing in mind that for larger pension funds you may not want to buy an annuity but use the facility of Drawdown where you take income directly from the pension fund and defer buying an annuity until you are older when annuity rates will be better. In respect of pension plans generally you can take up to 25% of the fund as a tax free lump sum and the benefits can be taken from the age of 55 onwards. Ring Steve for more help during office hours on 0845 094 9025.

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