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Why Retirement Line?

We’re annuity specialists

Arranging annuities is all we do

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Your pension options since April 2015

Pension freedoms for people from the age of 55 with a “money purchase” or “defined contribution” pension now give you more choice and flexibility in withdrawing your pension savings. However, with greater choice comes greater responsibility – take too much today and you might have nothing left to live on in the future for you and/or your spouse or partner.

Our service is aimed at supporting the goal of the Financial Conduct Authority (FCA) who require firms like ours to provide consumers with the right information and “risk warnings” based on their circumstances. This enables them to make informed decisions on the pension freedoms, the main ones of which are:

  • A lifetime annuity - providing a guaranteed retirement income for life
  • A fixed term annuity - providing an income for a selected period
  • Flexi-access drawdown (Drawdown) - providing a flexible retirement income
  • Taking your whole pot as cash

After taking your tax-free cash sum, normally 25% of your pension savings, you can mix and match any of these options, using different parts of one pension pot or using separate or combined pots. There can be quite a lot to weigh up when working out which option or combination of options is most suited to your needs and circumstances so you might need to take your time to understand your options.

Annuity rates can be highly competitive, often varying a great deal from one provider to another. It is therefore vital that you exercise your “Open Market Option” by shopping around for the best deal - this is a key function we carry out for you. In addition, since 1 March 2018, any lifetime guaranteed annuity quote must be accompanied by an ‘information prompt’ from the issuing provider to confirm if the income offered to you is the best in the market. It can be very reassuring for our clients to know that we have achieved the highest income for them.

As well as potentially losing out on the highest rates, your existing pension provider may only offer you the most basic type of standard annuity. This could deprive you of a wider choice, such as an enhanced annuity or a fixed term annuity which could give you more income and much better suit your needs and circumstances.

Under Drawdown, your savings are invested, normally in stock market related funds, from which you can take whatever level of income or ad hoc withdrawals you want each year. This lasts for as long as your fund remains capable of meeting your cash needs, meaning you have to depend on future uncertain investment returns. 

Lastly, taking your whole pot as cash is now available. The first 25% is normally tax-free but the rest is subject to income tax at your highest tax rate, so you need to consider very carefully how much you take over 25% if you wish to avoid paying too much tax. 

Scam warning – post April 2015!

With your best interests in mind, following the new pension income options introduced in April 2015, please beware of scammers seeking to cheat you out of your pension savings. Scammers will often try to rush you into a decision, offering you a limited “very attractive” investment opportunity.

You should be on your guard against this type of fraud, as once you have been tricked into transferring the money to someone operating a scam, it will usually be too late to do anything about it.

We highly recommend that you only discuss your pension income arrangements with a firm which is authorised by the Financial Conduct Authority (FCA). Our details can be found in the Financial Services Register on the FCA website: https://register.fca.org.uk. Our registered number is 726601.

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