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Are
you over 50, and do you have a personal pension and
require additional income? If so, one way of gaining
access to some of your money and still leaving the
remaining amount invested in your fund is through
a facility called 'pension fund withdrawal' (PFW)
or 'phased retirement' (PR).
Boosting
income
If
appropriate to your situation, PFW could give you
the opportunity of delaying the purchase of your annuity
until you reach the age of 75, while enabling you
to draw an income directly from your pension fund
in the meantime. This income must be at least 35%
and not more than 100% of what you would have got
if you had taken out an annuity, as calculated by
the Government Actuary's Department. So you could
take this additional income (subject to the limits)
and leave your fund invested in assets that still
have the potential to grow.
In
the event that you die while using the PFW facility,
some or your entire pension fund could then pass to
a nominated beneficiary, such as your spouse.
Phased
Retirement (PR)
You
should not confuse phased retirement (PR) with PFW,
although the effects are not dissimilar. If you have
a money purchase scheme that allows for segmentation,
this means that the scheme is, in fact, lots of little
schemes rolled into one. Each segment of the scheme
is its own discrete pension, and you can take the
benefits from each of them when you like, between
the ages of 50 and 75. So you could, perhaps, take
one bit of your pension every month from the age of
55 to 60. In this way, you gradually phase in your
retirement benefits.
You
can use PR in conjunction with PFW, which could be
particularly useful if you are self-employed or, indeed,
if you plan to wind down your workload (and income)
gradually over several years.
To
investigate these two options further and see if they
could be appropriate to your income needs, please
e-mail or contact us for a complete analysis of your
situation.
(article
date 03/2003)
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