Not sure what pension option is best for you?

With retirement on the horizon, you have different options that can help you live the lifestyle you want to enjoy after work. Be it taking up that hobby that fell by the wayside or spending more time with the people you love.

But which pension option is best suited to your situation and future goals? You might not know where to start, and that’s exactly why we’re here to help.

what if I need care

Here’s a fictional example, based on the experience of our customers who come to us for financial advice, so you can get an idea of how it works…

Meet John – Mechanic, age 66.

John hasn’t always been on top of his savings – he’s a ‘go with the flow’ sort of guy, more interested in picking up his guitar than keeping track of his pension.

He started work at 16 as a mechanic in the local garage and has worked for a lot of different employers since, even going self-employed for a time.

Now he’s married and has two pensions from different employers he’s put money into over the years. He also owns a small property that he rents out, giving his income a little extra boost.

John wants a bit of help to figure out what’s the best way to make use of the savings and income he’s got. And while the rental property would pay them enough to cover the basics if he retired, it’s always good to have a bit of extra money with which to enjoy life.

One of his pensions is with us and he’s noticed we offer financial advice. So he gives us a call and, after speaking with one of our advisers, realises he has a lot more choice than he previously thought.

On the one hand he could take an annuity. He’d convert his entire pension into a regular, guaranteed monthly income for life. This felt like the safe option, although he’d only be able to receive a set amount of money once a month.

Or, there’s income drawdown. It would be more flexible and let John take out as much money as he has available as and when he needs it.

And third, he could have a mix of both, which could be a good choice for a mix of security and flexibility in retirement.

Getting to know his situation better however, our financial advisor recommends John choose income drawdown. It offers the kind of flexibility he prefers and, with the extra income from his rented house, the kind of freedom he can afford.

The advisor reminds John that its value will depend on the amount of withdrawals, providing he has the funds available, as well as the performance of the investments and the impact of charges. Plus, future income is not guaranteed so it may not last a lifetime. It's important for John to remember that the value of his investments can fall as well as rise and he could get back less than invested.

John fully understands that though and is happy with his choice. Our adviser answered every question he had, and he feels comfortable moving his money into income drawdown, knowing the benefits he’ll get from it.

John feels more in control of his pension money, and both he and his partner can relax. They know they’re on top of their money as they enter the next chapter of their lives together.

John regularly reviews his retirement fund to check it’s all ticking along nicely – after all, it needs to last a lifetime. This way he can make sure it’s still the right choice for him, safe in the knowledge he can call us anytime for further advice if he needs it.

Aviva financial advice

Need help figuring out the best way to use your pension money? Find out how our financial advice support team can help you decide what’s the best option for you.

Product provided by: Aviva Pension Trustees UK Limited. Registered in England No. 2407799. Aviva, Wellington Row, York, YO90 1WR. Authorised and regulated by the Financial Conduct Authority. Firm Reference Number 465132.