Taking an income from your pension

When you start to access your pension, how will you take an income? One of your options may be to withdraw a flexible income that suits your needs through flexi-access or capped drawdown. A flexible income puts you in control and means you can adjust how much you withdraw from your pension if you need to. However, you

also need to consider what income is the “right” amount to balance your short- and long-term needs. There is a risk that you could withdraw too much too soon and face financial insecurity in your later years. In fact, according to a report from think tank World Economic Forum, the average UK man faces outliving his pension by more than 10 years. For women, it’s more than 12 years. As well as spending too much, worrying about your long-term financial security could lead to you being overly frugal in retirement. It may mean that despite working hard and saving diligently, your retirement falls short of expectations, even if you have the pension savings you’d need to reach your goals.

Deciding how much to withdraw from your pension can seem like a balancing act, and there are often many factors you need to consider. In a Legal & General survey, 94% of people said their most important retirement dream is to feel financially secure. With that in mind, here are seven questions you may want to consider if you’ll be accessing your pension flexibly.