Recommendations From A Pension Adviser

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Choosing a Regulated Financial Adviser

One of the best things to do when you are planning your retirement, is time to talk to a pension adviser. They will be able to give you practical tips and recommendations on which scheme to invest in. There are several schemes available in the market today, but choosing the right one will mean that your investments will grow and that you will have a comfortable income during your retirement.

Wealth management is important if you want to live comfortable during your retirement. A good pension adviser will help you make the right decision for the best pension plan.

What Do Pension Advisers Say About Annuities?

Any company employee who has a defined contribution pension or occupational money purchase scheme can save up for his retirement. Find Out More About UK Pensions. This allows the individual to have a regular income during old age or retirement. Here is a list of some things you should know about annuities according to pension advisers.1 

Lifetime Annuity

lifetime annuity or annuity is a financial option for working individuals who want to have regular income upon retirement. During the time of their employment, their contributions are saved into a fund that will be used later to buy this type of contract from any insurance company. According to pension advisers, the plan holders have the option to use a part or the entire pension amount to purchase an annuity. The annuity will normally paid out monthly, quarterly, half yearly or annually.

Pension Adviser

Depending on the details, the amount of the annuity could stay the same throughout the years of payment or it could have automatic annual increases built into it.

You will need to check the details for this. If there is an increase, it could be fixed at a particular rate per year or it might vary with the change in the Retail Price Index each year.

You have the choice to transfer a part or all of your annuity fund to your surviving spouse/civil partner in case you pass away. Your insurance company must also know if you want your beneficiaries to receive the payments for a certain minimum period (usually between 5 to 10 years) even if you pass away before the end of that period.

According to pension adviser, two factors determine the value of your annuity – the value of your retirement plan and the annuity rate set by the insurance company you are dealing with.

Enhanced And Impaired Annuities

An enhanced annuity is the most suitable financial option for individuals who are regular smokers, overweight, and working in hazardous jobs. An impaired annuity, on the other hand, is for people suffering from special medical conditions such as diabetes, high blood pressure, kidney failure, heart problems, and some types of cancer, as well as chronic asthma, multiple sclerosis, etc.There are many pension tax reliefs that you can benefit from. Read our detailed articles to find out how.

A Pension adviser will suggest that you prepare your doctor’s medical report because the annuity provider will ask for this. This is to ensure the validity of your claims in your application. Also there are many benefits from an offshore scheme. Make sure you are well informed about all the options that are available for you. If you want to read more about all the pension rules – make sure you check the information we have on our website! Pension advisers suggest that an enhanced annuity will guarantee a higher income than a regular annuity because the insurance company does not see itself providing you with long years of payments because of your assumed shorter life expectancy.

Pension Adviser

Open Annuities

According to pension adviser, an open annuity is most beneficial for people with a substantial pension of more than £250,000 and who have other sources of income upon retirement. It also gives the plan holders the option to set aside a part of the fund for their beneficiaries. This type of annuity has more flexible characteristics than other types of annuities. You can contact us and talk to our reputed financial adviser about its advantages and disadvantages.

Pension Advisory On Lump Sum Payment

When retirement comes, you are faced with two options, either to take the lump sum2  amount or choose an installment payment. There are many factors that can affect your choice to take either of the two benefits, which includes the amount of contributions you have made, whether you are eligible or not, and if the provider allows you to make that kind of choice. If you have questions about these issues, the advisory gives helpful information to guide you in making the best decision regarding your retirement benefits.

Early Withdrawal

Pension Adviser

According to the pension adviser, it’s best to have more than one option so that you will not be forced to use your money that is meant for your retirement.

Most companies do not encourage their employees to avail themselves of early disbursement of funds due to the following reasons: penalties, taxes, reduced pension benefits, and investment loss.

But if you are in a position where taking an early lump sum payment is the only choice, then you have to know the consequences involved. After all, the purpose of a pension is to provide funds for your retirement.

Lump Sum Tax

Your Basic State Pension is taxable, this is the same for any kind of plan in the UK. If you apply for a lump sum option upon retirement, the pension adviser recommends that you have to pay around 20% in taxes. If you want to avoid splitting your hard-earned money with the taxman, you have two options: roll your funds into an IRA (Individual Retirement Account) or transfer your funds to an international retirement plan.3 

If you are planning to live abroad permanently, you should seriously consider the second option. By the time you retire and have opted to take a lump sum payment, you do not have to worry about paying HMRC4  for any kind of taxes.

You have to make sure that your chosen international scheme is recognised by HMRC. But if you do not have any plans of changing your UK residency status, then take the first option. You can have a tax-exempt status even if you make multiple rollovers. You might lose some future privileges like tax breaks and incentives if you roll your savings into an IRA,5  though. Make sure you are well informed when you speak to your pension adviser.


Different companies set different rules for qualifying for a lump sum payment. Private employers, for example, make their own eligibility criteria which employees must satisfy to get as much as 25% of their fund. These may include the age of the plan holder, length of service with the company, number of contributions, etc.

Whatever financial situation you might have right now, there might come a time when you would want to take a lump sum option upon retirement. Therefore, it’s wise to know how much you should put into your fund so you can be assured of a comfortable life during old age.

How Much Can You Release?

Value of Your Home?

How Much Can You Release?

Most people are using Equity Release as a means of retaining the use of their house while also obtaining a lump sum or a steady stream of income. Get matched with an expert and check your eligibility for equity release options.
Use our free equity release calculator & see how much you can release today.

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