How to guarantee an income in retirement

One in six are worried they'll need to ask their kids for money during retirement

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C4T88N Retired smiling senior woman reading newspaper on the bed at home

New research shows on one in six people are worried they'll need to ask their kids for money during retirement.

Justin Urquhart Stewart, from Seven Investments, said: "It's astonishing when you think about the fact that actually most parents would be saying 'what can I provide for my children?' But of course it may well reverse

See also: Why the UK is the worst European country to retire in

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"Care homes, healthcare, all of those things are going to be much much more expensive."

At retirement you may be entitled to the new state pension of £155.65 per week plus a workplace pension you've contributed to while in employment.

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Here are three ways you can guarantee an income during retirement:

1. Get an annuity

This pays a fixed amount for life - this offers income certainty but you can't access your cash to withdraw of invest it.

2. Get a drawdown pension

This invests your money in the stock market but lets you take out lump sums to spend however you like on day to day things or a nice holiday! But 58% of people don't understand the risks

Urquhart Stewart says: "Suddenly you're tempted by having this large pot of cash, so I can go out and spend it all.

"But of course, the pot of cash has got to last you a long time.

"The other issue is going to be inflation and it can erode like acid the value of what you've saved."

3. Get a guaranteed drawdown

This offer can be the best of both worlds - it guarantees a level of income that can increase. You can access your money if you need it, although this will reduce your income.

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