Deferring your income in retirement
Is it a good idea to put off retirement, and not access your pensions straight away? It could be, but it will depend on a number of factors, from whether you can or want to continue working, to how much you have saved and how much you will need in retirement.
Do I have to take my pension when I’m supposed to?
You'll have nominated a date on which your private pension matures, and the provider looking after those funds – be it a workplace pension or a private pension provider – will use that date to calculate examples of how much income you'll get. But there are no reasons why you have to start taking that income, there and then.
As of April 2015, you now have a range of options available for when you decide you want to start using your pension savings, from taking a lump sum to using an annuity or income drawdown to generate an income. Each of the options need to be considered against a number of factors, so to find out more take a look at the options available.
What about my State Pension – can I defer that too?
Yes, we explain how to do that and how beneficial it can be on our State Pension page.
So is it a good idea to defer my retirement?
If you do leave your pension pot invested, you will have more time to add further contributions. And the level of income you can hope to secure is likely to be greater. However, you have to offset this with the income you would have received over the time you have deferred, so it's not always a straightforward calculation. If you have pension savings, it might therefore be worth spending some time with a financial adviser to help you work out the numbers. If you don't have one, just go to thepfs.org or unbiased.co.uk.
How do I know if this is the right thing to do?
In April 2015, the government introduced the "Pension Wise" service. It is designed to provide you with free, impartial guidance on your options, and to help make sense of any implications of any decisions you make. It is also worth thinking about taking financial advice, as although there is usually a cost attached, it can help with making the right decisions for your circumstances.
Alternatively, Just Retirement Solutions - our sister company - offers an annuity comparison service that could help you make sense of your options.