Centenarians On The Ascent, Can Taking An Early Pension Lump Sum Help?

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It has long been accepted that enhancements in medicine, standards of living and a knowledge of the effects which habits like smoking can have on our health means life expectancy is rapidly increasing. Generations to come are likely to enjoy much longer and healthier lives on average than their predecessors.

Nonetheless figures released in April 2011 by the Dep. of Work & Pensions illustrate more accurately precisely what that suggests. These figures suggest, of the under 16s already alive today, over a quarter are going to reach the age of 100 “and already, the average new-born female is going to live to over 90.

As Steve Webb, Minister for Pensions, stated at the time, this means that millions of men and women will spend over a third of their life in retirement. However , as the DWP were quick to identify, this news also coincides with a period during which pension savings are in heavy decline.

An ageing population is putting our welfare system under substantial pressure as more people require not only pension income but also medical care, incapacity support and help within the home. You can thus have little belief that a State Pension will provide anything apart from a safety cushion when the time comes. If your retirement plans include holidays, visiting family and treating yourself on occasion, then its time to take control of your savings and commence building up a retirement fund of your own.

One of the most significant decisions you make when it comes to planning your retirement is which annuity or unsecured pension product to go for and naturally, whether to use the 25% early pension lump sum you have entitlement to (taking this will have an effect on your potential earnings in retirement). It’s this basic choice that will establish your ultimate income and isn’t a decision to be treated lightly.

Information thanks to Adviser Hub. Whatever course of action you decide upon; whether or not it is taking out an annuity, unsecured pension or choosing an early pension release, it is recommended you undertake a full pension review with the help of a certified pension adviser.

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