Beginners' guide to pensions and retirement

When you retire.

The moment has finally come and you can hang up your working boots and become a person of leisure! You can normally decide to take a retirement income from your pension any time between age 55 and 75, in many circumstances even if you're still working. Until 6 April 2010, it may be possible to take your pension from age 50.

At your selected pension date, you’ll have a number of options to choose from. You don't have to make these decisions until you’re approaching retirement, when you may want to discuss your options with a financial adviser.

If you are a member of a final salary scheme, the retirement income you’ll receive will be determined by the rules of the scheme. It will be based on your earnings and the length of time you’ve worked at the firm. You’ll need to contact the scheme administrators for details of your retirement income, and your options.

 

If you are a member of a money purchase scheme, you will have a number of different choices depending on the size of pension pot you have built up, the type of pension you have and how old you are. You don’t have to buy your retirement income (typically an annuity) from your pension provider.

Researching the market to find what is called an ‘open market annuity’ could boost your retirement income significantly.