Quick pension question

[Norfolkandchance]

I two pensions, one very good, but I'd like more money in retirement and to be able to retire earlier.

Is the normal thing to do to save / invest for the 15 - 20 years I have left till I retire, then use the lump sum to buy an annuity when I chose to retire? Or is there a pension-specific product I should I be look at paying into?

Thanks

Edited by Norfolkandchance on Monday 19th November 17:17

[JulianPH]

Norfolkandchance said:

I two pensions, one very good, but I'd like more money in retirement and to be able to retire earlier.

Is the normal thing to do to save / invest for the 15 - 20 years I have left till I retire, then use the lump sum to buy an annuity when I chose to retire? Or is there a pension-specific product I should I be look at paying into?

Thanks

Edited by Norfolkandchance on Monday 19th November 17:17

It is not your 'pensions' that are either good or bad. It is the investments held within them that count (unless you have a final salary scheme...?).

Yes, it is the normal (and very wise) thing to do (save until you retire). Using this money to buy an annuity is a completely different matter though.

To keep it short, buying an annuity is basically an exchange of all of the money in your pension for a guaranteed income for life. The guarantee obviously comes at a cost and is only as reliable as the company offering it.

Income drawdown is the other option. In this case you keep all of the money you have saved within your pension (and it is IHT free upon death) and draw an income down from this.

There is no right or wrong answer. It is personal choice.



Edited for clarity

Edited by JulianPH on Tuesday 20th November 07:41

[silentbrown]

JulianPH said:

Yes, it is the normal (and very wise) thing to do (save until you retire). Using this money to buy an annuity is a completely different matter though.

At the risk of stating the bleeding obvious, OP should invest in some kind of "pension-specific product" to get tax advantages (while they last), rather than just sticking it under the mattress or whatever.

[JulianPH]

silentbrown said:

JulianPH said:

Yes, it is the normal (and very wise) thing to do (save until you retire). Using this money to buy an annuity is a completely different matter though.

At the risk of stating the bleeding obvious, OP should invest in some kind of "pension-specific product" to get tax advantages (while they last), rather than just sticking it under the mattress or whatever.

Agreed.
..
i was trying to be polite...

[Ginge R]

Norfolkandchance said:

I two pensions, one very good, but I'd like more money in retirement and to be able to retire earlier.

Is the normal thing to do to save / invest for the 15 - 20 years I have left till I retire, then use the lump sum to buy an annuity when I chose to retire? Or is there a pension-specific product I should I be look at paying into?

Thanks

Edited by Norfolkandchance on Monday 19th November 17:17

“It’s not what you make, it’s what you keep!”

A pension product (or wrapper) might not be the most appropriate course of action for you. Depending on your individual circumstances or needs, you might find that an ISA or Investment Bond is as or more appropriate alongside.

If you’re fifteen years from retirement, the two things that you do have control over right now are strategy and costs. Cheapest isn’t always best, not by a long chalk, but make sure you look at the impact of them. Secondly, spend some time considering what your needs are going to be in retirement, what your resources/assets are going to be, and how they are going to be best served. This projection of cash flow needs will better inform you about your choice of wrapper and strategy.