You are usually not required to access your pension at any particular point. Instead, you can leave it invested until you wish to take it.


The rules today don’t oblige you to purchase an annuity at any point, and therefore this can be a very tax-efficient way of passing assets on. The lifetime allowance limit is likely to restrict the amount that can be accrued in this way and it’s worth noting that at age 75, the accumulated pension benefits will be mandatorily tested against the lifetime allowance one final time.

State Pension entitlement can also be deferred past state retirement age. This can be beneficial if you continue to work, as future pension payments will be increased to reflect the deferral. However, before deferring, careful assessment must be carried out, as under the new Single Tier State Pension rules your spouse will not benefit from your entitlement on death, and there is limited entitlement to the lost pension payments. An independent financial adviser at AFH can talk you through deferring your pension, and whether this is the right option for you.

It is very important to stress that, at retirement, any asset or investment can be used to support your lifestyle. Investment planning should therefore be diverse to allow you to benefit from the various investment wrapper options available.

The recent reductions in the lifetime allowance have resulted in many having to consider alternatives to pension investment, in order to reduce the impact of any annual allowance or lifetime allowance tax charges. Whilst the use of ISAs and other savings vehicles is an option, they don’t provide the benefit of tax relief that makes authorised pensions such a compelling option.

There are investments that offer different forms of tax relief, such as enterprise investment schemes (EIS) or a venture capital trust (VCT). However, the generous tax relief attached to these options reflects the fact that they’re often very high-risk investments.


It’s highly recommended that you seek professional guidance and advice before any course of action. An independent financial adviser will be able to talk you through your suitability for this option.

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