If you have a “money purchase” pension plan (for example a personal pension plan) and you want to start to take benefits from that plan here are 5 things you might consider doing;
1) Obtain an up to date valuation from your plan provider. Check that the figure you have been given is the actual value you can use to buy benefits if you transfer to another provider, perhaps one offering better annuity rates for example;
2) Decide if you are going to take a tax free cash lump sum and what you will do with that lump sum (spend it, invest it- perhaps to generate some further income, or give it away);
3) Check and see if your existing pension plan contains any valuable guarantees such as a guaranteed annuity rate which might be higher than any you can obtain in the open market;
4) Determine if you are entitled to an enhanced or impaired life annuity based on any pre-existing medical conditions or history, or if you have a lifestyle (smoking for example) that will entitle you to an improved annuity rate;
5) Consider those who will be around after your death do you want/need to make any provision for them?
Making the right choice at retirement can be quite complex but it is vitally important to get it right as it will have to last you for the rest of your life.
