Pension income in retirement is known as an Annuity. This annuity will provide you with a guaranteed level of income, which is determined by the amount of capital you have to invest either from a pension policy or from savings.
When you reach your selected retirement age many people, wrongly, assume that they have to take their pension from the Company that they have paid their contributions to. Think of your pension in two ways, firstly when you are contributing to it during your working life trying to accumulate as high a fund as possible. Then when you retire to obtain as high a level of pension income from the fund that you have built up.
It is possible to increase the level of pension that you can receive in retirement by exercising what is known as an “Open Market Option” instead of just buying your annuity from the company that has your pension fund. This facility can prove invaluable especially if it enables you to receive a higher level of income in retirement that is payable for the rest of your life.
On reaching your selected retirement date you will receive final verification of the value of your accumulated fund. Your pension provider will also confirm the level of annual annuity they are willing to provide you with based on their current annuity rates. There should also be another figure provided by your pension provider and this is known as an ”Open Market Option”. This figure should match the fund value and is the amount that will be paid by your provider to another annuity provider in order for you to obtain the highest level of income possible in retirement. For more information on annuities Click Here to view Frequently Asked Questions
We can advise you on all the options available to you such as, how much it will cost to add a spouse's or dependent's pension and explain the benefits of annuity guarantee periods.
We have outlined some more advantages to you below:
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