Your circumstances and priorities
Long life expectancy and the benefits provided when you die
When making your decision, you should consider your spending needs for however long you think you’ll live. This can have quite an impact on how you choose to take your benefits and what you leave behind for any dependants.
Predictability
When making your decision, you need to consider whether you prefer the comfort of knowing that you will have a regular income or the flexibility to withdraw funds according to your needs recognising that these funds could run out.
You should consider whether the option will provide you with sufficient protection against increases in the cost of inflation.
Main source or Part of retirement income
If you have multiple sources of income that provide you with financial security then the predictability and security from your Scheme pension may be less important to you. If this is your main or only source of retirement income, the predictability and security from your Scheme pension is likely to be more important to you.
Security
When making your decision, you need to think about the level of risk you are comfortable with as well as your ability or desire to manage any investments throughout your retirement. Whilst managing your investments may give you the opportunity to grow your retirement savings, they could fall in value too, plus you have to make time to manage the investments as well as pay ongoing investment & advice charges.
Which option suits you?
Understand the features of the retirement options you have and see what’s important to you.
Some example members
Here are a few examples of people who thought about how to pay for life after work. Each example member picked a different option, we’ll explore why and what their own priorities were. What they picked is colour coded just like the options throughout this site e.g. Scheme pension, annuity, drawdown and cash.
These are just examples to help explain the different options. They should not be read as suggesting or indicating which particular option could be right for you.
Sally’s choice
For Sally, a pension that could provide a regular income for life for her, and her husband Jim if she died first, and which provided protection against future increases in the costs of living gave her the peace-of-mind she needed. So, she decided not to transfer out and took the Scheme pension.
Harold’s choice
What was important to Harold was a regular income each month, similar to the Scheme pension, but tailored to better suit his circumstances. Harold took financial advice and was recommended to transfer out of the Scheme and buy an annuity from an insurance company.
Privani’s choice
Privani wanted flexibility to take her money a bit at a time, changing how much she took and when. After taking financial advice and confirming that this was the right thing to do, she transferred out of the Scheme and took Drawdown.
Privani is used to making investment decisions and knows about the ongoing investment charges. She has a guaranteed income, from other sources to meet her basic needs.
Ben’s choice
Because Ben had other retirement savings, which would provide him with more than sufficient income in retirement, he wanted to take this pension as a cash lump sum. So, after taking financial advice, he transferred out of the Scheme, cashed out and used the money, after tax, to enjoy his hobbies.
