Pensions

Richard enjoys his job and is in good health. His original chosen pension date was 62, but he now doesn’t intend to access his pension savings before age 70.

Richard’s pension pot with OneFamily is one of a number of plans he has so he is comfortable with continuing with his current higher risk investments and the associated risk of values going up and down as he has other pensions and a good amount of savings. This will allow him to pick the best time to start taking his benefits.

Richard has considered transferring to another provider so as to take advantage of Lifestyle switching options but has decided against it.

A Lifestyle switch option would gradually move the invested money from the higher risk funds to lower risk over the five years leading up to his chosen pension date. From that point his pension savings would stay invested in the lower risk fund until he accesses them. Investing in a lower risk fund with lower growth potential would mean that whilst his fund values would be more stable the buying power of his pension savings would be reduced by inflation, impacting on the value of future income.

Jenny is 56 and had planned to work until her chosen pension date of 60. However, her daughter has just announced she is expecting twins and so Jenny is rethinking her retirement plans and planning to cash in her pension in a year's time so she can help with childcare when her daughter goes back to work.

When her children were young, Jenny worked part time and has several pension pots from different employers. She has decided to cash in her OneFamily pension plan only, leaving the others to accumulate for later.

She has reviewed her investment choices and decided to switch her OneFamily pension savings into a lower risk fund to reduce the potential for a drop in value shortly before she cashes in her pension plan. She understands that by investing in a lower risk fund, inflation may reduce the buying power of her pension savings and she may miss out on any potential growth if financial markets produce strong returns.

Naz has worked for several companies during her career. She has a good company pension from one employer which will provide a reasonable level of income. She is approaching 55 and plans to transfer her OneFamily pension plan to another provider in order to access flexible retirement income.

She is planning to take maximum tax-free cash and then draw down taxable lump sums, as and when she needs, to pay for extras such as a holiday or new kitchen.
She is comfortable investing in medium risk funds and accepts that she could lose money if the value of the fund drops.

Before discussing her options with the Government’s Pensionwise service, Naz was considering if she should use lifestyle switching but has decided not to. This is because, after taking tax-free cash, the balance of her pension savings are likely to remain invested for many years as she will only access her pension savings from time to time to top up her income. She does not want to miss out on potential growth if financial markets produce strong returns. By investing in a lower risk fund with lower growth potential, she is worried that the buying power of her pension savings may be reduced by inflation, impacting on her future income.

She has reviewed her investment choices and will move part of her pension savings into a lower risk fund a year in advance of whenever she plans to access them.

Reginald (Reg) is looking for a guaranteed income for life from his chosen pension date

Reg is just over five years away from his chosen pension date of age 65. He was late starting to save for a pension and has the majority of his pension savings with OneFamily.

Having looked at how the value of his pension pot has gone up and down over the last few years, Reg feels it is time to remove some of the risk from his pension savings and wants to make use of Lifestyle options. When he gets to retirement age Reg is planning to access his pension savings to buy a guaranteed income for life.

Reg wants the security of knowing that his pension savings won’t fluctuate as much as his chosen pension date approaches. So, he has decided to transfer his pension pot to a provider that can offer Lifestyle and annuity options. He understands that he might miss out on potential growth if financial markets are strong and that by investing in a lower risk fund, inflation may reduce the buying power of his pension savings.

Christine is happy with OneFamily’s service, charges and fund choice at this moment in time, but is planning to review her fund options in the last 5 years as she approaches retirement. If Onefamily does not offer a fund she is happy with at that time she is planning to transfer her accumulated pension pot to another provider, possibly bringing together a few other small pots she has elsewhere. Christine is planning to transfer to another provider nearer her retirement date to give her access to a broader range of options like drawdown facilities as OneFamily don’t offer that option.
Christine is not yet sure how she will take benefits when the time comes but is happy that the ability to move her funds to another provider without charge is sufficient flexibility for the time being.