Other Options

When you reach retirement, you do not have to take an annuity to provide you with your future income. You can use your fund to buy other types of investment.  This may involve increased risk and the value of your investment and the income from it may go down.  We don't recommend this route unless the value of your pension fund is over £100,000 or you have other retirement income.

Other options include:

• Unsecured Pension (USP) - with this type of pension you make your own investment decisions.  You can increase or decrease your income as necessary and keep the option to purchase an annuity at any time until the age of 75.  Legislation sets out the maximum income you can take and this is reviewed every 5 years.
• Alternatively Secured Pension (ASP) - At 75 you have two choices if you haven't yet taken an annuity.  You can either purchase a pension annuity or transfer your pension into an ASP. This option lets you defer the purchase of a pension annuity indefinitely. Legislation sets out the minimum and maximum income you can take and this is reviewed every year.
• Trivial Commutation - If the total value of your pension funds including those from which you have already taken benefits, is less than £16,500 you can take all your pension as a cash lump sum rather than an income.  Part of this will be subject to tax.  This can be done between age 60 and 75 but must be completed within a specified 12 month period.

If you need advice on other options, please make an appointment with one of our experts at Bank of Scotland Investment Service by calling 0870 121 4899.