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What to do with surplus pension in retirement

Retirees with generous defined benefits pensions might prefer to leave additional pensions money to grow, rather than spend it. But they need to know the tax rules

Welcome to the fifth article in How To Invest Your Pension for Income - an Investors Chronicle series designed to help DIY investors know the rules and make their pension investments work for them.

Not every investor in an income drawdown arrangement wants to take an income from their pension, so this week we're looking at what you need to consider if you're investing your pension to save for later, rather than spend it now.

If you have a decent-sized defined benefit (DB) pension, consider yourself lucky: gold-plated pensions are a dying breed. DB pensions (where your pension is related to your salary in employment and length of service) tend to be generous arrangements, and give you a guaranteed income; unlike defined contribution (DC) pensions (where the size of your pension pot is decided by your investment returns).

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