Blended/Hybrid

This approach could offer a solution to some clients. It provides a level of security in retirement that most people need, this can be coupled with a personal pension which will allow you to benefit from a degree of flexibility and the potential for investment growth (alongside to the potential for loss).

There are a two main ways you can go about achieving this combination.

• Blended solution – this is a combination of separate retirement solutions. With the help of an adviser you might seek out the best annuity rate and best drawdown product and divide up your cash equivalent transfer value from your defined benefit pension scheme between them.
• Hybrid solution – this differs from a blended solution in that the two elements – an annuity equivalent and drawdown – are held within a single financial product. Income is accumulated within a pension cash account, with the option for it to be retained in cash, reinvested or paid out. This allows for control over the timing of regular and one-off payments. While money and investments stay in the product they are treated as drawdown funds when it comes to paying out pension benefits to your beneficiaries, should you die.

Benefits

• Mixing a secure income with a more flexible pension will use some of your pension savings to provide security and give you an income to ensure that you can meet your retirement needs. The remainder can be invested into a personal pension which will give you a degree of flexibility with some of your savings.
• This strategy involves using an annuity and a personal pension. Please refer to the links in the images below to review the benefits of each route.

Drawbacks

• As part of this type of solution will involve an annuity purchase this will mean that this section cannot be changed once it is in payment, even if your circumstances change significantly.
• This strategy involves using an annuity and a personal pension. Please refer to the links in the images below to review the drawbacks of each route.
• To revisit the drawbacks of transferring form a defined benefits scheme please click here.