Preparing for retirement can be a tricky task. Not only do you need to make sure you're ready to leave work, both financially and mentally, but you need to give your retirement income a huge amount of consideration.
Your retirement could easily stretch to 20 years or more so maximising your income is key, thereby giving you the chance to achieve a comfortable standard of living throughout your golden years. But, one of the most important decisions of all will be deciding what to do with your pension pot:
The industry has been widely criticised for failing to offer consumers value for money, particularly in the wake of low annuity rates and a distinct lack of competition in the market – and even a lack of awareness of other providers. That's why the Association of British Insurers (ABI) has stepped in, with the organisation pledging to offer support to pre-retirees to help them maximise their retirement income.
The ABI has outlined plans for the pensions industry to implement a new minimum standard, with the reforms intended to ensure customers will get the help they need to turn their pension savings into a meaningful income.
In order to do that, ABI members will be required to:
The changes have been designed to build on the Retirement Choices Code (a code of conduct developed by the ABI to help pre-retirees understand the options and shop around for the best deal) and work on the challenges uncovered by the Financial Conduct Authority's annuity review, which identified key issues in the annuity market that could affect the chances of pre-retirees securing the best deal.
This clear focus on helping consumers hopefully means a lot more people will feel confident about their options at retirement, and ideally they'll get a better income too. ABI members now have 18 months to implement the necessary changes ahead of a summer 2015 completion date, but if your pension provider isn't yet offering the support you need make sure to consider alternative arrangements.
Heading to the open market should be a vital part of retirement planning, thereby giving you the best possible chance of securing the best deal. And, if you're looking for clear, impartial advice, make sure to consult our no-obligation annuity service to consider the options and see if you could get more from your pension pot.
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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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