446735002-Pension-Fix-by-Martin-Lewis

Turning your pension pot into an income
At some point you’ll stop working. This could be when the state officially
calls you a pensioner, a date of your choice, or you may even retire in stages.
Whichever route you take, when your regular income stops... it’s decision time.
Ideally, start preparing a few years beforehand for most of it. Planning the key
decision about buying an annuity, which is a product you buy to get an income
for life, should start at least six months in advance of retirement.
The only situation when you don’t have to turn the pension into an income is
if you are a member of a specific type of company pension called a ‘final salary
scheme’ or ‘defined benefit’ scheme. Here, you’re simply paid a proportion of
your final salary depending on your length of service.
Must you buy an annuity?
Until April 2011, you had to buy an annuity by age 75.
Now, you can still buy an annuity or take what’s called a ‘flexible drawdown’
or ‘capped drawdown’ product.
However, not buying an annuity can be risky, especially for those with
pensions pots smaller than £200,000.
You’ll find full details of those options in this guide and how to get more help
if unsure.
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