For financial advisers only
ARC's flexible retirement income options
Aegon Retirement Choices (ARC) can stay with your client throughout their working life and into retirement. Many people now choose a more gradual transition from working life into retirement, and ARC is flexible enough to support a phased approach.
ARC offers a seamless transition from saving to taking an income, with a range of flexible options to suit your clients’ needs. With the ARC self-invested personal pension (SIPP) your clients can choose:
- how they take their income and any tax-free cash after 55 (57 from 2028);
- how much income they take;
- when they start taking income;
- to keep their money invested until they need it, and
- to draw cash lump sums.
The table below details the three main ways your clients can take benefits from the ARC SIPP. They can combine the different options to meet their individual needs.
|Cash lump sum||Annuity||Flexi-access drawdown, including drip feed drawdown|
|Cash in part of your client’s pension, and take a tax free lump sum of 25%1 of their total pot.||Guarantees an income for life but with limited flexibility.||Provides an income while your client’s fund remains invested. This income may be subject to tax at your client’s marginal rate.|
|Guaranteed income for life||Not applicable||Yes||Not applicable|
|Pass savings to loved ones||Yes||Extra cost||Yes|
|Make changes if needed||Yes||Not applicable||Yes|
|Growth potential||Yes||Extra cost||Yes|
1 The amount of tax-free cash available may vary depending on circumstances and any guarantees previously secured.
The value of an investment can fall as well as rise and isn’t guaranteed. Your client could get back less than they originally invested.
Maximising pension income
Your clients can choose to take their benefits using drip-feed drawdown - an automated, tax-efficient way to take their pension income. Explore drip-feed drawdown and read our case study to see how drip-feed drawdown can help your clients maximise their pension income.
The value of an investment and any income your client takes from it can fall as well as rise and isn't guaranteed. Your client could get back less than they invest.
As annuity rates can change substantially and rapidly, there’s no guarantee that when your client purchases an annuity the rates will be favourable. This could mean that your clients' pension may be less than they hoped for.
For flexi-access drawdown, the level of income isn't guaranteed. Drawing income will reduce the value of their account. They may need to reduce their drawdown income in the future, in particular if investment performance isn't sufficient, or they live to a greater age than originally anticipated.