Annuity Advice

Annuity Advice

As you near retirement age, you will be thinking about what to do with your pension.  After working hard and saving for many years, it is important for you to compare your different options to ensure that you get the most from your pension. You could choose to purchase an annuity plan, which involves making a trade of your pension to an insurer in return for a guaranteed fixed income paid to you regularly up to your death.

However, you may be unsure whether or not to take out an annuity plan, as they tend to have both pros and cons attached to them.  In this case, it would be wise to seek annuity advice to help you work out whether it could be a good option for you.

See below for our service to help you get advice on your annuity options:

You may wish to weigh up the following positives and negatives of annuities:

Pros

• Guaranteed fixed income
• Receive a lump sum of up to 25% of your pension when purchasing annuity
• You could receive more money than was in your pension fund if you live longer than expected
• People with illnesses or unhealthy lifestyles could receive higher income payments

Cons

• You could end up with less money than was in your pension if you die early
• Annuities are irreversible
• Healthy people could expect to receive smaller income payments.
• You may find it helpful to speak to an Independent Financial Advisor (IFA) for impartial annuity advice.

Remember that not every insurance provider will offer you the same amount of income in exchange for your pension, so it could definitely be worthwhile for you to take the time to shop around and compare what each provider could offer you for your money.

Before 2006, it was compulsory to purchase an annuity before reaching the age of 75. This was increased to 77 in 2010, and the annuity age limit was eventually scrapped in April 2011. As a consequence of these new regulations, it is now possible for people to avoid purchasing annuity plans altogether. The alternative to annuity is income drawdown, which involves you leaving your pension funds invested, with the ability to draw funds out from it directly. Use our partner annuity  service to assess your options.