After a lifetime of working and saving, retirement is your chance to relax, enjoy your freedom and make time to do what you want to do. Securing your retirement income is one of the most important decisions you’ll have to make.
What you choose to do with your pension savings is a big decision, so it’s important to get it right.
It might be a good idea to take financial advice. A financial adviser can look at your individual circumstances and give you specific recommendations based on your unique personal and financial situation.
Are you on track to have enough income in retirement?
As you approach retirement, think about whether the income from your pension, savings and any investments will be enough to give you the kind of lifestyle you want to lead.
Consider how much you will need to live on in retirement. If there’s a shortfall between the income you expect and the lifestyle you want to lead, review your savings to make sure they’re working as hard for you as you would like.
Your retirement income options
There are various options to secure an income as you approach retirement. If you have a defined contribution pension, you can take up to 25% of your pension pot as a tax free lump sum from your 55th birthday.
With the rest you can choose to buy a guaranteed income for life (typically buying a conventional annuity), keep it invested and make withdrawals (flexi-access drawdown) or withdraw it all as a lump sum (but there are important tax considerations for doing so).