What is an annuity?
Our service introduces you to advisors who will:
- Explain your annuity options to you.
- Show you how to maximise your income using annuities.
- Ensure dependants are catered for while planning.
- Demonstrate the tax consequences of the various options.
- Discuss your alternatives to annuities.
- Look at the impact of annuities on estate planning.
The main aim for you and us is to find an environment in which you can feel fully informed about annuities and maximise your pension assets.
Annuities are investments designed to safely convert pension funds into regular taxable income. Selecting the right annuity for you is about more than just the best rate available, especially if you are married and still have dependants.
Specialist Annuities like impaired life annuities, can have a significant effect on the income level you are being offered. If your mortality has been seriously affected by a terminal illness or some other misfortune then many companies will take the impact on your life expectancy into account. In the cold, calculating light of an actuaries office, the shorter your life expectancy, the larger your potential annuity payout.
Open Market Option (OMO):
Knowing that you have the right to shop around for your annuity provider can seriously enhance your income in retirement. This means that the company you spent years making pension contributions to for your retirement does not have to be the same company that provides your income in retirement. The Open Market Option literally means the entire annuity market is open to you, for you to shop around and find the highest bidder or best rate.
Who needs the income?
Selecting the annuity that is right for you is about creating peace of mind for yourself today and financial comfort for any dependants in to the unforeseen future if you die early.
Selecting the right annuity also means looking at the overall tax consequences and the impact it will have when being added to your other income-producing assets in retirement.
Taking out an annuity can also be a question of timing. Why take out an annuity if you don’t immediately need the income? Deferring the decision can not only reduce taxation – it can also increase your pension entitlement in the future when you do decide to take it, because your fund was given more time to grow.
Asset preservation for future generations is important for some people and not for others. Looking at annuities while considering the impact on future inheritance issues will allow you to balance your decision making.
Annuities Choices & options:
Not only are there different types of annuities including purchase life annuities, compulsory purchase annuities and impaired life annuities. As mentioned earlier you need to factor in guaranteed periods as well as dependant pay-outs in the event of an early death. All of the options and added extras have a cost consequence so are there any alternatives?
The short answer is “yes!” the slightly longer answer is to encourage you to look at our sections on income drawdown and phased retirement.
It is often said that a little knowledge is dangerous, especially in the highly complex and structurally demanding area of pensions. So unless you intend to spend large amounts of time researching and wondering if your making the right decisions or not, then make life easier by aligning yourself with an ally in the form of a qualified professional advisor.
Start the annuity processes by allowing us to introduce to a suitably qualified annuities advisor – complete our form today
Find out about death benefits, cash lump sums, new rules, taxation, the best providers, IHT, guarantees, and the best annuity for you… Immediate Vesting Personal Pension – Compulsory Purchase Annuity – Purchased Life Annuity