The Budget for 2012 was delivered on 21 March and outlines changes to tax, state pension and other benefits. To find out how the Budget will affect you, see the key points here: Budget 2012 Key Points
What is an Annuity?
An annuity is the only retirement option that pays out a regular income to a policyholder for the rest of their life, irrespective of how long they live. The pension annuity provides a steady stream of money in retirement, providing certainty for the future. It is generally purchased between the ages of 55 and 75, using either part or the entire pension fund saved up during a person’s working life. As with the level of tax relief, these ages may be subject to change.
If you are about to retire and want to speak to a professional about getting the best annuity rate available for you Click Here.
Level of Pension Income
The level of pension income received by a policyholder depends on the annuity rates at the time the annuity is purchased from an insurance company. A person’s sex, age and health also have an impact on the level of income received. Once an annuity has been purchased, the regular amounts that an annuity pays out cannot be changed.
Accordingly it is important to Shop Around in order to take full advantage of the most competitive annuity rates available, especially since a person does not have to purchase an annuity from the same company through which the pension plan is arranged.
Higher income payments can also be received by way of an enhanced or impaired life annuity. These are available for those that, due to health problems, have a lower life expectancy than persons in full health. The market for annuities is open and subject to daily price changes and so shopping around really can make a significant difference to the ultimate retirement income purchased with the pension fund.
Normally the purchase of an annuity is irreversible, as the pension fund is lost forever after it is swapped for regular income. So you have to make sure you get it right - Contact an Annuity Professional now.
However, a new form of annuity named, “third way” annuities, have emerged which enable a policyholder to receive an income up to the age of 75 before providing them with a second opportunity to buy an annuity. Third way annuities are specialised products and their purchase will require the help of an independent financial adviser.
Purchasing an annuity is one of the most important decisions you will make regarding your retirement, as such a suitable amount of time should be set aside to research, compare and consult before making a decision.
Thinking of Retiring soon? Have a look at our Annuity Comparison Table