Once you have stopped working, whether you have enough income to support your ongoing lifestyle is up to the retirement planning that you do. There are a number of financial products available to suit retirees that include equity release options, pension annuity schemes etc.

Most people opt for the annuity that pension provider offers without using the open market option. But since you are entitled to the open market option, so using it to explore the market for better annuity plans only makes more sense.

Many people choose to release equity from their homes so as it generate an additional income or to obtain a large chunk of cash without the need to sell the house. While equity release may be an excellent option for some, it does have its pros and cons. These should be understood properly so as to avoid a rash decision. (more...)

When you get a mortgage, sometimes you can feel like you are starting out on an unknown journey in which you do not know how it ends. According to the Council of Mortgage Lenders, in 2012, there will be an average of £5bn in net lending for mortgages that lenders will give to customers.

Capped drawdown is going to be one of the key features of the mortgage trends in 2012. Here are the key features of how capped drawdown works so that you are fully equipped with the information you need to make the right decision for mortgages:

The nuts and bolts: The way capped drawdown works is it stimulates a certain degree of cashflow. Capped drawdown allows customers to get their hands on a lump sum which is tax free. This is fantastic if you feel like you want to start a business and you need an amount of capital to launch your business for example. Your capped drawdown lump sum will allow you cashflow which is one of the most integral parts of being financially free from the things that can tie you down in life. One good thing about capped drawdown is there technically is not a limit on the amount that you can take as long as your mortgage can cover it. A discerning factor of capped drawdown is the fact that you get a tax free lump sum without having to be tied down into any long details about annuity policies to buy. (more...)

Most people invest in a pension as a part of their retirement planning. Until recently, pensioners did not have the flexibility to take as much income as they want from their pension funds. One of the newest forms of income drawdown is flexible drawdown which allows pensioners to remove more income from their pension funds than is normally permitted if the Minimum Income Requirement is met by them.

The Minimum Income Requirement or MIR was implemented by the government to prevent people from removing all of their money from their pension funds and then relying on the government for support in their retirement years. People who are able to meet the MIR are allowed to remove as much money as they want from their pension funds. Although it is not advised due to the taxes that they may have to pay, pensioners who meet the MIR can remove all of the money from their pension funds in one go.

The current MIR is set to £20,000 per year. This is the guaranteed income that a person must have on a yearly basis before tax in order to qualify for flexible drawdown. Since that this income must be guaranteed, only specific sources of income are acceptable. The three accepted sources of income are: lifetime annuities, state pensions, and scheme pensions. (more...)