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RETIREMENT OPTIONS 2.1
PURCHASE AN ANNUITY
- This can be direct
from a money purchase occupational policy, called an Occupational
Pensions Annuity (OPA) or from a Personal Pension fund, called a Person
Pensions Annuity (PPA). You
normally have the choice of taking the Open Market Option of
transferring the funds to another insurance company of your choice and would then have to buy an annuity from that second company.
This would be called a compulsory Purchase annuity (CPA) from an
insurance company or other annuity provider. 2.2
PHASED
RETIREMENT -
Many pension policies are split into lots of small policies.
This enables you to “retire” with some of the policies to
give you some cash and some income and to leave the other policies still
invested to be drawn later. This
is not normally available for occupational pension schemes. 2.3
INCOME
DRAWDOWN -
Sometimes called pension fund withdrawal.
You can leave the funds invested but start to take an income from
the fund. The Government
Actuaries Department (GAD) produce tables with a monthly figure which is
the set amount of pension that can be provided from a given fund.
It is possible to take less than this set figure in which case
your funds may grow to allow you to take a larger pension in the future.
You must take at least 35% of this GAD figure.
At least every three years the amount you are drawing must be
re-calculated. By age 75 at
the latest, all of the fund must be taken as a combination of tax free
cash and the rest used to purchase an annuity. 2.4
SELF
INVEST-
Currently you can only do this until you reach age 75 at which
point you must take the benefits by purchasing an annuity (with the
possibility of taking some of the fund as a tax free lump sum). 2.4
LEAVE
IT FULLY INVESTED
- Currently you can
only do this until you reach age 75 at which point you must take the
benefits by purchasing an annuity (with the possibility of taking some
of the fund as a tax free lump sum). |