Annuity Age Limits

Annuity Age Limits

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.

However, even though purchasing annuity is not a necessary requirement when you reach a certain age limit, you still may wish to consider it as an option for your pension.  An annuity involves you trading your pension to an insurance provider in exchange for a guaranteed regular income.  It could be a good idea to compare the benefits of annuity to those of other options such as income drawdown.

See below for our service to help you get a better deal on your annuity:

Although many people may benefit from an annuity plan, others may not. The following advantages and disadvantages of annuities could help you to decide whether you might wish to invest in one or not:

Advantages

• Receive a guaranteed, regular fixed income
• You could be able to withdraw up to 25% of your pension as a tax-free lump sum when purchasing an annuity plan
• If you live longer than expected, you could end up receiving more money than in your pension
• Ill or unhealthy people could benefit from higher regular payments

Disadvantages

• In the case that you died early, you could receive less money than was in your pension fund
• You cannot cancel an annuity
• If you are reasonably healthy, you may receive smaller regular payments

Not every insurance provider will offer you the same deal on your annuity, therefore it makes sense to compare different quotes to ensure that you are getting the most from your pension.