City Research Online

Pension pots and how to survive them

Mayhew, L., Smith, D. and Wright, D. (2015). Pension pots and how to survive them. London: International Longevity Centre (ILC-UK).

Abstract

Annuitising at retirement is not the best option.
This new research report produced by Cass Business School argues that most people are better off drawing down, rather than annuitising.
In 2014 the UK Government announced proposals to allow people to withdraw money from their pension pot from age 55, subject to their marginal rate of income tax in that year. This paper looks at how individuals can best use their pension pots.
The research finds that with careful management, moderate sized pension pots of £100,000 or more should not run out until at least the age of 80 or even older. Using a flexible rather than fixed drawdown approach can reduce the risk of running out still further.
The research recommends having a full financial ‘health check’ at the point of decision, and if drawdown is decided upon then the research recommends seeking regular independent professional advice thereafter.

Publication Type: Report
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management
H Social Sciences > HG Finance
Departments: Cass Business School > Actuarial Science & Insurance
Related URLs:
URI: http://openaccess.city.ac.uk/id/eprint/16805
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