Phased Retirement Pension plans can be made up of a number of individual plans enabling you to choose to buy annuities at differing times. This gives you the flexibility to ease into retirement over a period of time, together with attractive death benefit options for your spouse.

Income Drawdown Income Drawdown is the name given to the facility to continue to keep your retirement savings invested and take an income each year rather than buy an annuity. This facility can only be continued to age 75, at which time an annuity has to be bought or the money transferred into an Alternatively Secured Pension (ASP).

The income that can be taken from a drawdown arrangement can be varied each year between a minimum and a maximum. The minimum is £0 and the maximum is 120% of a pension calculated according to tables produced by the Government Actuaries Department (GAD). These tables are based on the amount your fund would buy as an annuity based on your life only and with no allowance for any future increase. The maximum amount needs to be recalculated every 5 years.

Annuities An annuity is a contract under which the member hands over all or part of their pension fund to the insurance company which agrees to pay out an income to the scheme member for the remainder of that person's life. The annuity would normally be paid monthly, quarterly, half-yearly or annually. The amount of the annuity may stay the same throughout the years of payment or may have automatic annual increases built in. The annuity can be set up so that all or part of it reverts to your spouse or partner in the event of your death. Also they can be set up so that they are payable for a minimum period, say 5 or 10 years, even if you die before that period ends.

The value of the annuity is dependent on two factors – the size of the pot and the annuity rate offered by the insurance company selling the annuity. The annuity rate is basically the factor used to convert the accumulated fund into pension.

IMPORTANT:- The illustration that you will receive when you effect a personal pension, is only a projection of the benefits that you might receive at retirement. These amounts are not guaranteed and will depend upon the performance of the chosen funds, the amount of contributions paid in, and the actual date of your retirement, as well as external influences such as inflation rates. The price of units can fall as well as rise, and past performance of funds should not be relied upon for future returns.