There are several options for you and your Retirement Savings that Crystal offer you when you start to plan your retirement. You have total freedom to choose the option that is right for you. The four options are listed below.
Drawdown is a way of getting pension income when you retire while allowing your Retirement Savings to keep on growing. Instead of using all the money in your Retirement Savings to buy an annuity, you leave your savings invested and take an income direct from the fund. We offer the option of a managed or flexi access drawdown, allowing you the freedom and full control of your Retirement Savings.
A managed drawdown would provide you with a regular monthly income for a fixed term.
A flexi-access drawdown would provide you with the flexibility to withdraw any amount of your pension savings whenever you require.
Please visit our page on Taking Your Retirement Savings for further information on our flexi-access drawdown options.
This option allows you to use your pension to purchase an annuity, which would provide you with an income throughout your lifetime. There are a variety of options available to you to tailor the annuity to what best suits your personal circumstances, but simply put, an annuity allows you to take up to 25% of your fund value as a tax-free cash lump sum with the remaining 75% being used to provide a regular income.
This option allows you to transfer your pension to another provider who may offer alternative options. Or if you prefer you can also transfer your pension held elsewhere into your existing Retirement Savings held with Crystal.
You can choose to withdraw your whole pension in one go as a one-off cash lump sum. Of which 25% is paid to you tax free and the remaining 75% is taxable and paid to you after tax has been deducted. It is important to remember this option will not provide you with a regular income and for many people it may be more tax efficient to consider the other options explained. You may not be able to use this option if you have certain protections that relate to the Lifetime Allowance. More information on Lifetime Allowance protections can be found on the gov.uk and MoneyHelper.
Whilst we hope you are always in good health, if, in the opinion of a medical professional your life expectancy is less than 12 months, you could be entitled to a Serious Ill Health Lump Sum.
This sum is awarded at the discretion of the Trustee who must receive evidence from a registered medical professional. The Trustee will then determine if you qualify for a lump sum equal to the value of your pre-existing Retirement Savings.
If you die before taking your Retirement Savings, the value of your savings may be paid to your beneficiaries or used to secure a pension on their behalf. The Trustee have discretion over who this is distributed to in order that the payment remains free from Inheritance Tax. It is important to keep your nominated beneficiaries up to date. If you change your mind about who you would like to make as your beneficiaries, you’ll need to tell us as soon as possible. Otherwise, the Trustee will be guided by your most recent instructions and your personal circumstances at the time of your death. You can nominate your death benefit beneficiaries on evoLink.
The Importance of Advice
Considering retirement is one of the largest financial decisions you will ever make, and yet many people don’t seek advice or know that advice is available to understand what the options are.
There are a number of options available to you, and the jargon may seem overwhelming. We understand that this may be why many people don’t seek proper guidance and advice.
Terms like “annuity”, “UFPLS”, or Drawdown can be confusing, and have very different pros and cons. You also should take account of other income when making your decision.
Making sure that you select the right option for you is important as it is often the case that these decisions cannot be reversed once made. You want to ensure that you give yourself the best chance of the financial security you have saved for.
Crystal Members have a few options when thinking about taking financial guidance and advice before retirement.
You can use:
PensionWise at MoneyHelper
Pension Wise is a government service from MoneyHelper that offers free, impartial guidance about your pension options.
An appointment with Pension Wise is free and will help you understand what your overall financial situation will be when you retire.
You will be able to talk you through your options to help you make the right decision. You’ll also find out about the other factors you need to consider when deciding on your options before retirement.Learn More