Sadly it is not that straightforward anymore. Thanks to falling annuity rates, there are now several ways to arrange a retirement income and, combined with the introduction of the “Lifetime Allowance” (a cap on pension funds), you are now bombarded by paperwork when you retire. This means reams of forms and myriad options that can be so confusing it is hard to see what each scheme is offering, let alone look at the bigger picture. You have to decide how you want your pension to be set up and this will depend on your personal circumstances. For example, do you want an income for the rest of your life, an income for your life plus something for your spouse or an income and a lump sum on your death? And these are just some of the choices!

You must also look at how many years you want the money to last and what lifestyle changes you are prepared to make to eke it out. As you can imagine, this is difficult stuff and it can be hard to determine the best course of action. Generally I find that people need someone to interpret the maths for them. In fact, I don’t know how you sort these things out without the help of an independent financial adviser – if only to deal with the paperwork!

This is such a complex yet vital issue, I will devote my next few columns to deciphering the various pension products on the market. Hopefully they will help you make more sense of your retirement.

If you can’t wait another month, as always seek professional advice.