Don't risk losing out on an increase in your pension income

Almost a year on from the pension reforms, you may still be considering how to get the most from your pension savings to help fund your retirement.

Historically, a pension annuity has been the most popular option used by those approaching retirement. Although other options are available; a pension annuity is still the only way to turn your pension savings into a regular, guaranteed income for life, for you and, if required, a partner. The income you receive is confirmed upfront and will continue to be paid to you, regardless of how long you live.

This often means that the longer you live, the more value you are likely to get from an annuity. Many people choose an annuity for the peace of mind that comes with knowing that your pension income won't run out before you pass away.

But were you aware that there are a number of choices you can make when buying an annuity that can impact the amount of income you could receive? These include:

• Whether you want your income to continue for a spouse if you were to die first
• If you want to protect your fund for beneficiaries in case you die after buying your annuity
• Whether you want your income to increase over time to protect you against the rising cost of living

Plus many people risk losing out on extra income as they simply accept what their existing provider is offering them.

Health and lifestyle factors, which often aren't considered in the quotes sent by existing providers, mean that you could qualify for up to 40% more pension income* through an enhanced annuity. Comparing the annuity market could provide you with access to higher annuity rates and therefore increased income for life.

Some conditions or factors that may qualify you for an enhanced annuity are:

• Smoking
• Diabetes
• High blood Pressure
• Heart disease
• Cancer
• Kidney Failure

Click here to instantly calculate how much pension income you could receive

However if a guaranteed level of pension income from an annuity doesn't feel like the right option for you, there are other options you may wish to consider, such as:

Pension Drawdown

Pension Drawdown is considered a flexible way to access your pension savings and manage your tax bill. It allows you to be in control of your fund as there are no limits to the amount that you can withdraw from your savings or when you can take it.

However, drawdown can have its downsides. As pension savings remain invested, there is the potential for them to reduce in value as well as increase because there is no guarantee of investment performance meeting future income needs. This means your pension income could run out during your lifetime if you're not careful.

Fixed-Term Annuity

A fixed-term annuity provides you with a guaranteed income for a period of between 1 and 25 years through a non-advised service (or up to 40 years via a Financial Adviser).

They allow you to choose the level of income you wish to receive and you'll know what fund value you'll have left at the end of your chosen term upfront. Although it's not possible to know how much income that remaining fund will secure for you in the future.
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So I should shop around?

Deciding on the right pension-income option for you might seem confusing and that's why talking to an experienced specialist or financial adviser is so important. Companies like Age Partnership who are impartial and can talk you through the pros and cons of each option as we as confirming whether you would qualify for an enhanced annuity and therefore increased pension income can help take the stress and worry out of the process.

For more information on your pension-income options, we recommend that you take a look at the Government's independent Pension Wise website before making any decisions regarding your pension-income options.

*Based on an enhanced lifetime annuity vs a standard lifetime annuity. Source: Money Advice Service

Click here to instantly calculate how much pension income you could receive