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The past few months has seen many headlines making it clear to consumers coming up to retirement that they do not have to take their benefits from their existing pension provider and that other options exist. It is widely now agreed that consumers must be informed that they could draw their benefits from an alternative provider instead.

This is a step forward, but the message still does not seem to have got through to the pensions industry. Our clients are still reaching their nominated retirement age and being inundated with reams of paper from their pension provider listing a multitude of options to select from. 

To clarify, the nominated retirement age was probably selected at the outset of the plan, maybe 30 years earlier and was probably just a guess or a hopeful estimate. 

There is no compulsion to draw benefits from most schemes at the nominated retirement age. A phone call or notification to the pension provider can defer the nominated retirement date to whenever is deemed appropriate if the individual has no need or desire to draw their pension immediately.

It is also not a foregone conclusion that an annuity may be the best solution for the client even if they do wish to draw their benefits straight away. There are other options available if the client does want to consider drawing their pension.

The problem is that the retirement options packs provided to individuals list off all sorts of options of how the benefits could be drawn from the existing provider. The options will cover various scenarios assuming there is a spouse or no spouse, assuming that you want a tax free lump sum or no lump sum, assuming that you want guarantees or no guarantees and the list continues. 

Pensions should be simple, but they are not. However, it is human nature to assume that if one particular route is pushed forward so many times, in this case drawing an annuity with the present provider, it must be the right route to take. The alternative routes are found as the very last options and lose all emphasis and gravitas amidst a paragraph of text. 

Whatever option is most suitable, this is a decision that usually cannot be reversed if an annuity is drawn. This decision could instruct how your live your later years and so it is vital that the optimum route is chosen. Professional advice is key to this decision making process, so if you have received correspondence such as this, or are approaching retirement and want more information on the options available to you, please contact us using the link below and we will provide you with a free review to guide you through your retirement options.