Whether you are at least 55 years old and have taken a tax free pension lump sum prior to retirement or not, when you reach retirement age, your most important choice will probably be between taking an annuity or using an unsecured pension product to defer that decision, potentially indefinitely.

The former will lock in a guaranteed income for you, whereas the latter option allows you to stay invested, at least partly, whilst you decide whether markets will get better - or worse - and whether you should actually take the plunge.

An annuity is specifically designed to provide a guaranteed income stream for life. This provides security and stability but does also mean you give up all right to the original capital. Without any guarantees, if you die earlier than expected, your descendants could be left with nothing.

With an unsecured pension you can retain entitlement to the capital but draw an income from it until you decide annuity rates are attractive enough to replace it. However, this latter option might provide less than you would receive from an annuity whilst you wait and you also leave your capital vulnerable to the volatility of markets, so its value could fall.

Unsecured schemes are now extremely flexible and offer access to a wide range of underlying investment funds, so you can assess the risk you are prepared to take and allocate your fund accordingly.

You might decide to combine the two approaches, keeping part of your fund invested whilst taking an annuity with the rest. If you are unsure, however, speak to a financial adviser and make sure you have covered all your options.