Phasing Your Retirement

Pensions flexibility has increased the options available to clients who wish to phase into retirement.

More and more people don’t want a hard stop at their normal retirement age. It can be for purely financial reasons or increasingly for lifestyle reasons. As people are generally more healthy and want to still have worth in society, there is often more requirements to take pension benefits in stages.

Pensions Freedom which came into effect in April 2015 changed the landscape as to how people can take retirement benefits.

You no longer have to take your pension at the same time you stop work, although you can do if you want. From age 55 (rising to 57 in 2028), there is usually the option to take up to 25% of a pension tax free, with a choice over how to draw the rest.

There is no requirement to use a pension all in one go, or to draw it at the earliest opportunity. In fact, you might choose to take some tax-free cash only and leave the rest (hopefully) growing for the future. If you have other sources of income, you might decide to defer taking your pension altogether, even after you’ve given up work.

Staggering your pension in this way could help you to supplement your earnings, addressing any shortfalls as and when you need to as well as stay within, and take advantage of, certain tax bands and allowances. How and when you decide to take your pension will depend on your individual circumstances.

This is why independent financial advice at this point can be so valuable. It help you to ensure you maximise the pension fund you have saved hard. Gain advice for how to utilise your funds in the correct way and take steps into retirement.

Everyone is different and at YorWealth we will build a plan to suit your specific requirements.

The value of your investments can go down as well as up. You could get back less than you invested. A pension is a long term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of fund when accessed, interest rates and legislation.

If you’d like to get advice about pensions flexibility, please contact the team.