Protecting Your Retirement Income
As we are all well aware, the current market conditions are hurting our pensions, so what can we do to help alleviate the pain?
There are a few options, which are outlined here:
- Check you are investing in the right type of funds. As you get older it is more prudent to invest in the less risky funds. Make sure that the pension funds you have are being managed in the way you want them to be. Check with your pension supplier or Financial Adviser.
- Reduce the charges. Check the amount of charges being made by your pensions provider and consider changing to a supplier who charges less. This can make a considerable difference in the long term.
- Phasing Annuities. In phasing annuities, you use part of the pension investment to provide the income you need now, but leave the rest invested. They can be cashed in at a later time when needed and there is always the chance that the rates will have gone up in that time, although remember that they may also go down.
- Drawdown caution. Changes in the rules on drawdown (ie keeping your money invested and taking an income from the pension fund) mean that income from drawdown can be seriously reduced or become taxable. Take advice on this.
- Consider another way of saving for the future? ISAs can also provide income which is tax free.
It is a potential minefield and any major decisions in this area should be discussed with an adviser.