Fixed Term Annuities
Compare One Year Fixed term Annuities
In the wake of the new pension legislation announced in 2014’s Budget in March, many retirees have been left pondering the question of what to do with their pension pots until the new regulations come into effect in April 2015. The reforms will mean that anyone aged 55 or over will be able to take their entire pension pot as cash if they wish to do so, rather than having to buy an annuity. While this increased freedom has been greeted with enthusiasm by many people who are retiring or approaching retirement, it does raise the question for many of how to best use their pension in the meantime.
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Bridging the gap with a fixed term annuity
To fill the gap, several providers are launching one-year fixed-term annuities in response to the recent post-Budget shakeup to the pensions system. The new products are designed for people at the brink of retirement who want to defer making a long-lasting decision about how they will take their pension income in retirement until new rules come into effect next year.
A one year annuity allows retirees to take their tax-free cash as well as giving them the option of starting to take pension income while avoiding investment performance risk. At the end of the term, customers can use the guaranteed maturity amount to choose the most appropriate retirement income option available once the new regulations commence next year. It’s believed by many industry experts that some people approaching retirement will want to wait to see what new choices might be available to them in April 2015. Fixed term one year annuities are intended to cater for this client group, as one of the key features of this type on annuity is its flexibility.
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.