Relax with a secure income

There are many types of secure income available – with lots of different features you can ‘bolt on’. These features are designed to offer extra peace of mind for you and your family after you retire. However, it's likely that any extra features you choose to add will reduce the starting level of your retirement income.

• Take care of your loved ones
  
  You can pass on a portion of your retirement income to your spouse, civil partner or other dependant(s) should they live longer than you do. 
• Keep pace with inflation
  
  You can arrange for your retirement income to increase each year. This can help protect the buying power of your money as the cost of goods and services go up over time. 
  
  
• Extend your income beyond death
  
  You can add a ‘guarantee period’ which means your income payments will continue to be paid for a set period of time - even if you die before then. 
  
  
• Have a lump sum paid on your death
  
  You can arrange for a lump sum to be paid to your loved ones on your death, should you die before them. 
  
  
• Get a bigger income if you’re in poor health
  
  You may be offered a higher level of income if you have any health issues or habits which could shorten your life expectancy. This is called an 'enhanced annuity'.

• Take some tax-free cash
  
  You can usually take up to a quarter of your retirement savings as a tax-free lump sum. You may be able to take more than this if you successfully applied to HM Revenue & Customs for a greater allowance.
  
  If you want to take tax-free cash, this has to be taken before you buy a secure income. Tax rules depend on your individual circumstances and may change in the future. 
  
  
• Decide how often you want your money
  
  You can tell your provider how often you’d like your income to be paid. This could be anything from once a month to once a year.

• You can’t change your mind
  
  Once you’ve used your retirement savings to buy a secure income, you can't usually change your mind - even if your circumstances do. So it’s really important you get things right first time. 
  
  
• Adding extra features will lower your income
  
  If you want to add any extra features, such as making sure your loved ones will get some of your income when you die, you should expect to be paid a smaller income. 
  
  
• Don’t lose out on any guarantees
  
  If your plan has a ‘guaranteed annuity rate’ it means your provider will guarantee to pay you a minimum level of income for the rest of your life, in return for your retirement savings. This is a rare and potentially valuable feature, so it’s worth checking whether this applies to you. 
  
  
• Your entitlement to state benefits could be affected
  
  The amount of income and/or tax-free cash you take from your retirement savings could affect your entitlement to means-tested state benefits, this includes such things as housing benefits and council tax reductions.

Unless you've chosen to pass on some of your income to your loved ones or set a 'guarantee period', your retirement income payments will stop when you die.