When it comes to key features for retirement income products, the most important are a guaranteed income for life, having as much income as possible upon retirement and having an income that keeps track with inflation.
This is according to new research from Partnership, which has revealed that people are also keen to find a structured product that allows them to pay the minimum amount of tax possible and which gives them control over the amount of income received each month.
Managing director of retirement at Partnership Andrew Megson commented on the findings, saying that despite the start of pension freedoms coming in, nearly two out of three Brits still think that guaranteed income for life is the most important part of a product. What’s more, people are now moving on from just maximising their income and are now looking to secure it for the long term.
“As the pension freedoms become the ‘new normal’ it will be interesting to see how people’s views change. Hybrid products which provide a guaranteed income along with the flexibility of an invested element with the potential for growth would appear to meet many of these customers’ requirements,” he added.
Pension freedoms explained
New pension rules that came in back in April last year have given people greater flexibility over what they can do with their pension pots. Now, anyone over the age of 55 can take their entire pension as a lump sum, paying no tax on the first 25 per cent. The remainder would be taxed as if it were a salary. This only applies to private pensions, however, and not to the state pension.
Typically, it would not be worth taking out your pension pot as soon as possible. Those of you in your 50s and 60s will most likely still be working towards your retirement, so your focus would perhaps be better directed towards ensuring you have enough income when you do retire. By keeping your money in your pension pot, you’ll enable it to grow. Additionally, if you access your funds earlier than necessary, you could reduce your ability to make contributions to it in the future.
There are various options you can consider. For example, you could leave your pension invested for when you need it, or take out your 25 per cent tax-free and buy something like a flexible income drawdown product that will keep the remainder of your money invested.
Alternatively, you could purchase an annuity, which will give you a guaranteed income for the rest of your life.
If you’d like further advice on what to do regarding your retirement, why not talk to one of our Bristol financial advisers here at Churchill Wealth Management? We can help you work out what’s right for you and how you can make the most of your money, both before retirement and during it.
Financial Advice Bristol
If you would like to speak with one of our Independent Financial Advisors and potentially receive financial advice, please contact us on 0117 923 7652. We are based in Clifton, Bristol but we are happy to service clients from across the UK and we provide free initial meetings at our client’s convenience.
Churchill Wealth Management Limited is located at 13 Alma Vale Rd, Bristol BS8 2HL, United Kingdom.
About Us: Churchill Wealth Management is a team of independent financial advisors/financial advisers (IFAs) based in Clifton, Bristol. We provide independent financial advice, including pension advice, investment advice, inheritance tax planning and protection/insurance advice.