Annuity At Age 75

Annuity At age 75

Financially speaking, an annuity refers to the exchange of a lump sum of money from your pension in return for a fixed income over a period of time. Many people are interested in transferring their pensions into annuities as a way of generating a regular income.

Some insurance providers offer annuities that will continue to pay you back for as long as are alive. Other insurers will provide a fixed term annuity plan (usually around 5-10 years) that will pay you up until the end of your set time period. In the case that you die, the fixed period will still continue to provide an income, possibly for a family member or surviving dependant.

The government announced in 2011 that buying an annuity at age 75 would no longer be compulsory. If you are looking to convert your personal, stakeholder or employer scheme pension into annuities and you are aged 75, the choice is now completely up to you.

There are a few important factors worth considering before you decide to trade your pension for annuities. These include:

  • Will you be protected against inflation?
  • How much risk are you willing to take?
  • Does anyone currently depend on you?
  • Do you want full control of your investment?
  • What is your general state of health like?

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The amount of income your annuities will generate will depend on a number of different considerations, some of which include:

  • The amount of pension you are looking to exchange.
  • The amount of tax free lump sum you decide to have.
  • Your state of health.
  • Your gender.
  • The extra benefits you chose. (E.g. joint/single cover.)

You are not tied down to receive annuities at aged 75 with your current insurer and so you shop around using the open market option which allows you to purchase an annuity from an annuity provider other than your pension provider.


 Important Risk Information:

This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.

Different types of investment carry different levels of risk and may not be suitable for all investors. Please ensure that you read the Important Risk Information for further details. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.