
Pensions
Although people are living longer, most of us are not saving enough for retirement
At tba Wealth Management we encourage all our clients to keep a long term focus on their retirement plans and fund their pensions accordingly
Understanding Pensions
A pension is simply a method of saving for retirement. What makes it different from other methods of saving is the tax advantages offered by the Government to encourage individuals and companies to make provision for retirement.

Why Pensions Matter
Planning for retirement has never been more crucial. Demographic trends in the UK show people are living longer while the working population is reducing. This puts an ever-increasing strain on the State Pension and an ever-increasing importance on private pension provision.
Types of Pensions
State Pensions
Provided by the government, paid out when you reach State Pension age (currently 66).
The amount received is based on your National Insurance contributions.
Workplace Pensions
Set up by employers, both you and your employer contribute a percentage which is taken directly from your wages each month.
You may be entitled to tax relief.
Personal Pensions
Private pensions that you set up and manage yourself. Payments can be regular or one off lump sums.
You may be entitled to tax relief.
Maximizing Your Pension
- Start saving early
- Contribute regularly
- Take advantage of tax benefits
- Consider additional voluntary contributions
What are my options at retirement?
There are a number of options available once you reach your chosen retirement age, some of the more common options are listed below:

Drawdown
Drawdown allows the pension member to take an income directly from their defined contribution fund, such as a personal pension or workplace pension.
There is currently only one method of drawdown available to pension members: flexi-access drawdown (FAD). However, in the past, members have been able to opt for capped drawdown or flexible drawdown.
Members can ‘crystallise’ some, or all, of their pension fund into drawdown once they have reached age 55 (57 from 2028). With each crystallisation, the member can typically access 25% of the money drawn down as a tax-free lump sum, with the remaining 75% taxed at their marginal rate of income tax.
Uncrystallised funds pension lump sum (UFPLS)
An UFPLS is a lump sum that is taken from a defined contribution fund from which benefits are yet to be taken, known as the ‘uncrystallised’ fund.
Typically, up to 25% of the UFPLS can be tax-free with the balance subject to the pension member’s marginal rate of income tax.
The member can take either the whole fund as an UFPLS, or just a portion of the fund. This enables a degree of control with regards to tax planning in retirement.
Lifetime annuity
Lifetime annuities allow a pension member to use their pension funds to purchase a contract from an insurance company. The insurance company will provide the member an income for life in exchange for some, or all, of the pension fund.
Lifetime annuities have the benefit of securing an income for life, giving annuitants comfort in that they are guaranteed a pre-specified level of income each year. However, a drawback is that lifetime annuities can be inflexible after inception.
For those of us in finance or with years of work experience, the importance of a pension might seem obvious. However, let's not forget that many young professionals, recent graduates, and school leavers might not have this knowledge. Help us spread the word to our younger audience who may be uncertain about their finances, especially when it comes to pensions.
Are you a young professional just starting out and feeling a bit lost when it comes to financial planning? 🤔
Don't worry, we've got you covered! Our latest video breaks down the basics of pensions in a way that's super easy to understand.
🔹 What is a pension? 🔹 Why should you care about it now? 🔹 How can it benefit your future?
Whether you're just entering the workforce or looking to get a head start on your financial future, this video is for you! 📈💼
Warning
The pension options listed above are not exhaustive and the specific options available to you will depend upon individual circumstances.
This provides basic information surrounding some of the pension options available to members of a registered pension scheme in the UK. It should not be considered financial advice. For financial advice, you should contact one of our financial advisors here.
The information on this page is based on our understanding of current UK legislation. Levels of taxation will depend upon individual circumstances and may be subject to change in the future.