An Annuity is an income stream bought using a sum of money. The purchase price can be influenced by several factors such as your age, income needs and even your health.
People often choose an annuity for the certainty it provides; your income can be fixed for a period of years, or even for the rest of your life. Using your pension fund to buy an annuity can take the investment risk away from your retirement income planning, when compared to alternatives such as Drawdown. As annuity rates are affected by interest rates, recent increases to the Bank of England base rate have seen annuity rates improve.
It’s not ‘all or nothing’, annuities can be used alongside Drawdown, or other pension income. You can use any proportion of your pension assets to purchase an annuity, or purchase an annuity for a limited period of time, retaining a capital sum for the future.
If you need more help and advice around annuities then please get in touch, we will be more than happy to schedule in a FREE consultation to discuss your options.
Disclaimer – Annuities are not suitable for everyone and every situation. The tax regime can also change. This is not an inducement to commence an annuity or to invest. You should contact a qualified financial adviser to discuss whether an annuity would be right for you.
