Income Draw Down & Phased Retirement
The biggest issue that most people have with buying an annuity is that they lose control of the capital in exchange for a fairly modest income. Some people feel that they might prefer to have more control over their income as they may still have some earnings capacity and want to supplement this with some pension.
Alternatively they may want the tax free cash but not the income from a pension arrangement.
A Self Invested Pension is set up with their existing pension funds. Income can then be taken within certain limits by using only small segments of the overall fund. The bulk of the fund remains invested and continues to benefit from fund growth.
The decision to commit to buying an annuity can be deferred until age 75. At that time circumstances may have changed and further decisions can be taken. A form of income drawdown can continue beyond age 75 by using Alternatively Secured Pension.
In the event of death some of the fund less a tax charge where appropriate can be returned to the members estate or be reallocated to another scheme member, such as a spouse or relative.