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Taking money from your pension

Did you know that if you want you can take a quarter of your pension money as a tax-free lump sum? With annuity rates halving over the last 20 years owing to increased longevity, some people are having to rethink their retirment plans entirely.

Prudential have claimed this week that almost eight out of ten people who retired last year received a lump sum from a company or personal pension scheme.

Vince Smith-Hughes, head of business development at Prudential, said: 'The days of buying a shiny new car or going on a once-in-a-lifetime holiday may be gone, to be replaced by making savings and investments with the lump sum to supplement retirement income.'

For many it boils down to the choice: cash in hand today, or a promise to get a higher pension tomorrow?

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