Most people recognise that it is wise to plan for their retirement. This is especially true for those who are hoping to retire before the usual State Retirement age.
Putting aside a regular amount of money during your working life is probably the most appropriate way to ensure that you will have sufficient income during your retirement.
Investing into a Pension plan has historically been the most popular method of making these regular investments. The tax advantages offered by the UK Government provide the opportunity for your Pension Fund to grow with virtually no tax. You are also currently allowed to draw a significant amount of your pension fund as a lump sum with no tax payable. (Please bear in mind that the rules around pension taxation may be subject to change).
Having successfully built up a pension fund during your working life, there will come a time when you will need to make some important decisions about how to use this fund. These decisions involve how you intend to draw your pension income to ensure the benefits best suit your needs in retirement.
Often people who are retiring to convert a portion of their pension fund into a tax free lump sum with the balance used to purchase an annuity or an alternative income plan.