Your options at retirement
Helping you choose how to take your pension
When you want to access your pension pot you have several choices. The right choice for you depends on things like your tax position, whether you have a partner, your attitude to risk and even your health.
Should you take a cash lump sum?
You can normally take up to 25% of your pension pot as a cash lump sum.
What kind of income do you need in retirement?
Your options are a guaranteed income (Annuity) and flexible income (Approved Retirement Fund). The table below explains the differences between the two options.
|Payable for life||Yes - guaranteed income for life||No - ARF could run out while you're still alive
|Access to income||A guaranteed income for life but no flexibility||Flexible income with no guarantee - normally you take out 5% of the value of your ARF each year but if you take out too much you could run out of money.
|Investment growth potential||None - You are locked into an annuity rate for life||Yes - your fund can grow or fall but you need to find a level of risk and reward that suits you|
|Passing on to your family
||Your income stops when you die (it may be payable for longer if you have chosen a guaranteed period and/or a spouse/civil partner's annuity)
||Your ARF can be left to your family (tax payable will depend on who you leave it to).
Taking your cash lump sum
You are entitled to a cash lump sum from your pension policy, normally up to 25% of your policy value (or 3/80ths of your salary for each year of service).
- The first €200,000 will be tax free;
- The next €300,000 will be taxed at 20%;
- Anything more than €500,000 will be treated as income and taxed under the PAYE system.
If you've taken benefits from a pension already, talk to your financial adviser as the limits that apply to you may differ.
What can I do with the lump sum?
You could use it to pay off your debts, fund that trip of a lifetime or invest it so that it has the potential to grow in a tax efficient way – it's entirely up to you.
Bear in mind that by taking a lump sum you'll have less left in your pension pot with which to buy an annuity or an approved retirement fund (ARF).
It’s easier to manage and could save you money
If you’ve got a few pension policies with different companies, it could make financial sense to bring them together. You'll be able to keep track of your investments at a glance and you may end up paying less in charges.
Why bring your pensions together?
If you are buying an annuity:
- More control - buying one annuity makes it easier to manage
If you are investing in an ARF:
- More control – a single set of figures makes it easier to review performance
- More choice – you may be able to choose from more investment options
- Fewer charges – one set of charges could save you money
You’ll also have one point of contact. And with My Standard Life online you’ll be able to check your policy value at a time that suits you.
Is combining your policies right for you?
It depends on your circumstances. Make sure you know the answers to these questions.
- Will you have to pay an exit charge? Check if your policy has an exit charge and what the amount is
- Could you lose a valuable benefit? You won't be able to transfer features like guarantees – you may have a fund with a guarantee and/or a policy with a guaranteed annuity rate
- Will you really save money on costs? Check charges for new and existing pensions to be sure
Transferring pensions isn’t for everyone. Speak to your financial adviser or contact us on (01) 639 7070 before you decide. Calls may be monitored and/or recorded to protect both you and us and help with you training. Call charges may vary.
Moving your pensions to Standard Life
Just give us a call on (01) 639 7070.
Calls may be monitored and/or recorded to protect both you and us and help with our training. Call charges will vary.
Any decision you make now will affect your lifestyle in retirement. Talk to your financial adviser to help you make the right decision.