Staying invested or deferring

Sometimes your circumstances may mean you decide to delay converting your pension into a retirement income. It may be that you decide to continue working or that you don't need the money just yet.

By remaining invested you can continue paying into your pension savings and should your funds grow, your pension pot could potentially provide more income. In this case you need to understand the funds you are invested in and ensure they match your appetite for risk.

Timing can play a big part in the income you will receive when you retire and you can choose to defer your State pension as well as any personal or company pension you are entitled to.

Use our retirement budget calculator to help you make a decision.

Staying invested or deferring
Advantages Disadvantages
Your pension pot may be larger if you’re able to pay into it for longer or leave it invested for longer. Depending on how your pension is invested, the value of your pension pot could go down as well as up, so there is no guarantee that your pension pot will be larger if you delay taking your benefits.
You may get a higher income because your pension will not have to pay out for as long. You may get a lower income if the rates used in converting your pension pot into an income go down.
You may get a higher income if the rates used in converting your pension pot into an income improve. The treatment of pensions has undergone major changes in recent years. There is no guarantee that the tax treatment of pensions or the choices available to you will remain the same in the future.

 

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