A lifetime annuity will pay you a guaranteed, lifetime income and for many is a popular way for ensure that you know how much you will for the rest of your life
It is imperative that when you are considering a lifetime annuity, you should review the open market option to ensure that you get the best annuity rate available rather than simply accepting the rate offered to you by the company you have your pension savings with
The Government’s Pension Wise have reported that 80% of people are missing out on extra pension income by not comparing the open market annuity rates available to them
When you use money from your pension pot to buy an annuity you can take up to a quarter (25%) of the amount as tax-free cash. You then use the rest to buy the annuity and the income you receive is taxed as normal income
How much retirement income you can obtain from a lifetime annuity will depend on your:-
- Your health and lifestyle
- How big your pension pot is
- Annuity rates at the time you buy
- Where you expect to live when you retire
- How old you are when you buy your annuity
- Which annuity type, income options and features you choose
An enhanced lifetime annuity could mean that you obtain up 50% more than a standard lifetime annuity. An enhanced lifetime annuity could be available if there is any aspect of your health and lifestyle that could reduce their life expectancy
Significant health conditions will generally produce a major increase to the pension income you receive, we could also find that lifestyle choices such as smoking, and drinking can also increase your pension income
To ensure that you find the best possible solution, our Pension Specialists will research the whole of the annuity market, including leading firms and specialist annuity providers such as Scottish Widows, LV=, Just Retirement and Prudential.
Our Pension Specialists will explain your annuity options and how they impact the pension income you receive, for example how often you’d like to receive your income payments, if you want your income to go up over time and whether you want to provide an income for a spouse or partner after you die
To discuss all your options in more detail please call one of our Pension Specialists at one of our regional offices who can recommend which options from the open market that are best for you.
