I need to draw my pension benefits from my existing provider.
No you don't!
Since April 2015, you have been able to withdraw as much of the money from your pension pot as you want when you reach 55, up to 25% of which can be tax free with the remainder taxed at your highest marginal income tax rate. Because there are now more options available, the new found freedom means careful, informed and educated decisions need to be made.
For instance, if you have a defined contribution pension scheme, sometimes called a personal pension or money purchase pension, you have many choices to make when you start to draw your retirement benefits. One of these is the option of buying an annuity. An annuity will provide you with a guaranteed income – for a fixed amount of time or the rest of your life. But you don't have to use your pension fund to buy an annuity with your existing pension provider - you have the option to shop around and compare rates. This is called the ‘open market option’.
If you have more than one pension with different providers it might be more efficient and result in a higher income for you in retirement if you combine them using the open market option to provide one source of income. You may also be eligible for an enhanced annuity, even higher income if you have any health or lifestyle issues.
It’s important to note that annuities are provided by insurance companies who offer different benefits and options within their annuity contracts – making sure you get the most cost effective annuity from the right provider for your personal circumstances is crucial.
It’s always best to get advice as your existing pension arrangements may have valuable guarantees that you don't want to lose. If you would like to talk through your options with us, call on 0131 303 0078 or email email@example.com