Good financial planning with clear goals can increase your retirement income by as much as 53%. Make the right decisions today to build a more prosperous future. Your Financial Plan: Build A Better FutureĪ good financial plan can help you make the right decisions when it comes to your finances. If you don’t have a CETV yet, then you can get an estimate of what your final salary pension could be worth if you transferred out using our Final Salary Pension Transfer Calculator. If you’re considering a final salary pension transfer to switch to a defined contribution pension that allows income drawdown, then you can enter your cash equivalent transfer value or CETV into our drawdown calculator to get an idea of what you could withdraw. Transferring a Final Salary Pension to Drawdown Remember: Whether an annuity or drawdown is right for you will depend on your circumstances, so it’s best to discuss your situation and circumstances with an adviser before committing to either option. While an annuity is irreversible, so you can’t buy an annuity then cash it in to enter pension drawdown, you’re perfectly entitled to opt for drawdown at first and then use any remaining funds at a later point to purchase an annuity if that’s what you prefer. You also don’t need to make an absolute choice between drawdown and an annuity. Income drawdown offers more control and flexibility than an annuity, as well as making it easier to leave a legacy to your loved ones after you’re gone. What’s more, there’s no inherent flexibility in this method of securing a retirement income when you compare buying an annuity with pension drawdown. Although this will offer you a guaranteed income for the rest of your life, annuity rates are currently very low due to a combination of economic factors, such as low interest rates and low yields on government bonds. However, the main alternative to income drawdown is buying an annuity. That’s because the pot is finite - every time you draw from it you reduce its total capital. There is a risk that your pension might not last long enough if you choose income drawdown.
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