Annuity: the word may be familiar, but how much do you
really know?
With the right advice when you buy your annuity, you could be thousands of £££s better off in retirement
While you work you pay into a fund. Although you probably think about it as paying into a pension, when you reach the age to draw your pension, this is not where the income comes from. You may have a personal or private pension, a company pension, or a stakeholder pension… When you near retirement age, you will probably hear from your pension provider saying it's time to spend your pension fund and purchase an annuity, to pay you a regular income. However, if you are living in Spain it may be more beneficial to have a QROPs to do this.
Buying an annuity
Your pension provider will probably suggest you purchase an annuity from them. You could be wise to shop around first because annuity rates can vary by almost 40%, so it is important that you make sure you get the best deal. It could make you thousands of pounds better off.
Calculating the 'Annuity Rate'
How much your fund will provide is calculated using an 'annuity rate'. This depends on various things, including your age, gender, interest rates at the time and whether you choose a level or an escalating annuity. Your Peter Male Advisor can make the calculations.
Watch out for charges
However, although you have the right not to buy an annuity from the pension administrator suggested by your company's scheme, there may be charges for transferring funds. So its advisable to check all options and take professional advice before making any decisions.
Making decisions
You'll need to decide whether to have the same payments throughout or to increase them in time; whether you want your annuity to pay out to your partner if you die, or you could choose an enhanced annuity which may give a higher income. All of these issues will impact on the annuity you will get.
Impaired Life and
Enhanced Annuities
If you have any existing medical conditions or are a smoker, if you have worked in certain occupations or live in particular areas of the country, you may be offered higher rate for these annuities, which may pay out thousands of pounds more than conventional lifetime annuities.
Retirement Annuities
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These were a type of pension plan that individuals could take out before 1 July 1988. They were replaced with personal pensions, but those started before July 1988 carry on until retirement.
How to Keep track of Your Private Retirement Pension
You will receive a yearly forecast from your pension service provider. This will tell you how much pension you can expect to receive if you continue to contribute at your current level.
The final value of your retirement pension fund will depend mainly on how much you have contributed and how well the fund's investments have performed. Please bear in mind that the value of investments can go down as well as up.
Remember that choosing a personal pension scheme is an important financial decision and there are many things to consider, such as the rules on making contributions, how the money will be invested and whether the pension scheme is 'contracted out' of the additional State Pension.
Financial Advice
Everyone's circumstance is different and off the shelf financial products may not cater for your personal needs; but with the right financial advice from a qualified and experienced financial advisor we can help you weigh up your options and execute your wishes.
Reviews & Checks
Life changes. For this reason, whether business or personal, a review of your financial present and future, can increase financial health and your peace of mind. Moreover, you need your money to work for you and that's our job. A quick chat on the phone is all that's needed.
Free Consultation
In the interest of the environment we like to determine your needs over the phone or email, and your free consultation can start from there. If we need to visit and need a few hours with you then we'll let you know if there are any fees. But we do offer the first hour for free.
Investments
All clients of Peter Male are seen as long-term clients and as such our relationships with all our investor clients are financially intimate. Moreover, liking each other is part of trusting each other so we nurture all clients at a pace that suits their pace and our approach.
Quick Links to Financial Solutions
Our Spanish Office
Peter Male Financial Planning has been operating from Benalmadena Pueblo, Malaga since 2002 and with agents in Spain and Introducers in the UK we offer more flexibility.
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