THE VALUE OF PENSIONS AND THE INCOME THEY PRODUCE CAN FALL AS WELL AS RISE. YOU MAY GET BACK LESS THAN YOU INVESTED.
TAX TREATMENT VARIES ACCORDING TO INDIVIDUAL CIRCUMSTANCES AND IS SUBJECT TO CHANGE.
Phased retirement which was also known as 'staggered vesting', allowed the purchase of a pension to be phased allowing flexibility when considering retirement.
Phased retirement worked by splitting the pension into many segments each of which could be encashed separately. The pension income is then composed of a combination of tax free cash and annuity from the individual segments. The remainder of the fund remains invested and may benefit from any market growth in its underlying investments.
From April 2015 there has been much greater freedom to choose how you use your pension fund and the rules regarding phased retirement are now largely irrelevant as there is so much flexibility in how you withdraw money from your pension.
TAKING WITHDRAWALS MAY ERODE THE CAPITAL VALUE OF THE FUND, ESPECIALLY IF INVESTMENT RETURNS ARE POOR AND A HIGH LEVEL OF INCOME IS BEING TAKEN. THIS COULD RESULT IN A LOWER INCOME WHEN THE ANNUITY IS EVENTUALLY PURCHASED.