Top Tips for Pensions in France



Top Tips for Pensions in France

If you have a UK Pension and you are over the age of 55 it may have occurred to you that you can access your pension for a lump sum and or income, be it to buy a holiday home or provide retirement income. So what options do you have?

Option 1 – Buy an Annuity:

Temporary or Whole life

Temporary Annuity: Spend your money on a 3, 5 or 10-year capital protected temporary Annuity. This will provide an income for the term with some capital returned at the end of the term (that can be reinvested in another temporary annuity) or on death during the term. These can be set up on a joint life basis or own life basis.

Fixed Whole life Annuity:

This option is a no risk income Annuity, i.e. giving your pension pot to an Annuity provider in return for a guaranteed income paid for life; this can be sole or joint life. This gives peace of mind to those cautious risk investors who want to know their income is safe. However, Annuity Rates are linked closely to Interest rates and therefore the income is likely to be low in comparison, and if it´s a joint Annuity and some form of indexation chosen then the income will be lower still. Also on death of the Annuitant/s the income stops and the money is gone.

Option 2 – Drawdown:  Capped (GAD) or Flexible

Capped Income Drawdown:  means what it says. The income withdrawals from the pension fund are limited under the Government Actuaries Department, (GAD), a set limit which is reviewed every three years.  It may be possible to transfer to a Flexible Drawdown scheme, however strict rules apply. These are not now available to new applicants, however if you have one this should be reviewed.

Flexible Drawdown:  The ability to take money as and when required from your pension, with no restrictions.  A simple example: if 5% pa of the fund is taken and the pension makes 5% pa growth, after all charges, then the pension pot would remain static, i.e. the same value. On the other hand, if the pension increases by more, this would provide an increase in the pot or income, but it could also go down of course.

Quite often we find that not all UK Pension Providers offer the Pension Flexible Drawdown Options. If your pension is a Final Salary Scheme, or an older style personal pension then flexible drawdown is not available without a transfer to a SIPP or QROPS.

With both of the income options above, when you die anything left in the pot is available to your beneficiaries such as a spouse. In addition, should you be in poor health then there is no need to purchase an annuity.

Option 3 – Lump Sum

Taking a Lump Sum: UK pension Schemes allow for 25% of the pension scheme value to be taken as a UK Tax Free Lump Sum.  Under UK Pension Freedoms it is possible to take all of your pension pot as a cash lump with the excess being taxable.

Note: 25% of the plan value is available tax free to UK tax residents only. This Tax-free allowance is not available to Expats who are French Tax residents.

The biggest concern most people have is how long will the pot last before it runs out and what are their investment options?

Financial Advisor Rosemary Sheppard


In these testing times, getting advice from a financial advice company that has weathered more than one or two financial downturns is essential for your financial wellbeing and peace of mind. Blacktower Financial Management has been established for over 32 years and has worked with its clients through good and the bad times, offering sound financial advice.

For an independent, professional and impartial consultation please contact me by email or call me on 06 38 86 99 70. You can also visit the Blacktower Financial Management website.

The above information was correct at the time of preparation and does not constitute investment advice and you should seek advice from a professional adviser before embarking on any financial planning activity.

Blacktower Financial Management Ltd is authorised and regulated in the UK by the Financial Conduct Authority. Blacktower Financial Management (Int) Ltd is licensed in Gibraltar by the Financial Services Commission (FSC) through whom we have a registered branch and passport for financial services in France. License number 00805B.

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