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Most employers are obliged to have an occupational pension scheme for their employees

There are two main types of occupational workplace pension schemes:

Defined-contribution schemes
A defined-contribution (DC) or money-purchase pension scheme is one that invests the money you pay into it, together with any employer’s contribution, and gives you an accumulated sum on retirement, with which you can secure a pension income, either by buying an annuity or using income drawdown. (more…)

Withdrawing any amount of money from your pension pot

Flexible drawdown is a special form of drawdown under which any amount of money can be withdrawn from the pension pot. There are two requirements you have to meet before undertaking this option: you must meet the minimum income requirement (MIR) and you must have stopped contributing to any pensions. As the name suggests, this option is more flexible than income drawdown. Qualifying for this option removes the cap on the income you can take. (more…)

How to use your pension pot for the years ahead

As you approach retirement, you will have to decide how best to use your pension pot for the years ahead. One of the ways of doing this is by entering income drawdown. Unlike an annuity, with income drawdown, your money remains invested and you take a pension income directly from it. This is a flexible way to take your pension benefits, although it may not be suitable if you want the security of income that an annuity offers. (more…)

Choosing the right option for you

In the UK, there are basically two types of annuity: (more…)

The lack of professional financial advice can be costly

You only have one opportunity to shop around for your annuity. This is called ‘exercising the open market option’. Once you have committed to an annuity provider and started to receive an income, the decision can’t be reversed. (more…)