Both personal pension’s plans and the stakeholder pensions plan are effectively money purchase plans. As you approach your retirement time, the pension office will come up with several offers and options relating to annuities under various pension plans. They will ask you whether you desire to have a phased retirement plan, or a lump sum or any other plan. The commencement lump sum will be of course, tax free.

Your retirement options shall be one of the followings.

• You may buy a secured pension that is also known as the conventional annuity. In this case you will know beforehand what your income is going to be. You can have either level or increasing income depending on your options.
• Generally people take a lump sum as commencement benefit and invest the balance amount in buying the conventional annuities. The plan could be implemented with the current pension provider or by transferring the funds to another pension provider. Remember that State pension benefit is secure, while the private provider benefits could be more competitive.
• You may buy investment bonds or investment based annuities. Such annuities could be profit linked or unit linked.
• Another option is to go for the phased retirement dividing your pension funds into segments spread over the years.
• The entire pension funds could be transferred to have unsecured pension.
• Finally you may have a combination of unsecured and phased retirement plans.