Phased Retirement

Personal pensions are usually split into segments, with each segment effectively being an individual plan. By drawing benefits from segments at different dates your retirement income can be tailored to meet your requirements.

Instead of using the whole of your pension fund(s) to buy an annuity, you use it in stages.   Phased retirement uses part of your fund to buy an annuity, while the rest of your fund remains invested.  

In subsequent years you can use another portion of the fund to buy another annuity. In this way you provide a flexible, tax efficient and increasing income.  

Some investors use the tax free cash element of the payments to supplement their income and thereby mitigate their income tax liability.  

Converting portions of your fund regularly means you:

• leave your tax-free cash in a tax privileged environment for longer;   
• reduce the impact of buying an annuity at the wrong time as you are spreading the purchases over a series of year    
• retain the flexibility to lock in on higher annuity rates, at a later date;     
• If you or your partner suffer from ill health, any subsequent annuity you buy could be at a higher rate;     
• On death, the part of the fund you haven’t converted to annuities can pay a pension for your surviving dependants, or a tax free lump sum.