(From April 2015, the rules involving annuities and income drawdown changed. Rather than having to purchase an annuity, pension savers can, if they wish, withdraw as much as they wish from their pension pots. In total, 25% of the pension pot can be taken free of tax; the balance being subject to income tax. Although this change may make annuities less attractive for some, many still prefer the security of knowing they have a guaranteed and secure income for life.)
An annuity is a contract between an insurance company and a pension scheme member, where the member uses some or all of their pension savings to purchase a regular and guaranteed income for the rest of his or her life or for a predetermined number of years.
The factors that determine the amount of income you can expect to receive include (but are not limited to) your age, state of health, your postcode, prevailing annuity rates, the type of annuity you buy and the size of your pension fund.
You’re invited to a free, no-obligation meeting with one of our pension advisers to discuss your pension needs.
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Depending on your circumstances and requirements, some annuities may be more suitable for you than others. We are here to assist and to ensure that you purchase the annuity that most suits your needs and circumstances.
If you do decide to buy an annuity upon retirement, you should ensure that you check policies, rates, restrictions, and benefits very carefully, and if necessary seek advice from a financial adviser. Investing in the wrong annuity scheme could cost you a great deal in annual income, so make sure that you look into this subject carefully before you make any commitment.
For independent, personalized financial advice, contact us today. Our expert advisers are ready to assist you.
