At Francis Clark Financial Planning we believe that the very concept of ‘retirement’ is out of date. A new generation is choosing to stop full time work on their own terms. They are fitter, healthier and have the desire and energy to do more than ever before. They expect choice and flexibility from their financial products and do not want to be ‘locked in’ to a product for life. That’s why we are doing our best to help retirees take advantage of their OMO rights to shop around."
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Choosing the right annuity for you
Once we have discussed your situation and identified the most suitable annuity type to meet your current requirements, we may also be able to help with choosing the most appropriate annuity options to suit with your circumstances.
There are many available and the list below is just some of the different annuity options available:
Single Life / Joint Life
Most annuities can be set up on either a single or joint life basis. Unless there is a guarantee, a single-life annuity will only pay out during your own lifetime. A joint-life annuity continues to pay an income to your partner after your death. You can usually choose between a joint-life annuity that pays your partner the same as you were receiving, or a proportion of the amount you were receiving (e.g. 50% or 67%).
Level
A level lifetime annuity pays the same income year after year for the rest of your life. A level annuity has a higher starting income than escalating annuities (see below) but how much you can buy with the income from a level annuity falls as prices rise.
Escalating
An escalating annuity pays a lower initial annuity but then increases each year. There are two main choices:
1. Fixed-rate escalating annuities – your income is guaranteed to increase at a fixed rate each year, say, by 3%
2. RPI-linked annuities – your income is adjusted each year to reflect changes in the Retail Prices Index (RPI), so will rise and fall.
Guarantee Periods
Guarantee periods are usually for five or ten years’ worth of income, even if you die within this period. On your death, the income may continue to be paid for the rest of the guarantee period, or it may be paid as a lump sum to your estate (and tax might be due on it).
Value Protection
A lump sum equivalent to the pension fund you used to buy an annuity, minus the income you’ve already been paid, will be paid to your estate or beneficiaries. There will be a tax charge and there may also be an inheritance tax charge on this payment.
Frequency
You can normally choose how you would like your annuity paid e.g. monthly in advance/arrears, quarterly, annually etc.
Contact us now to speak further about this service
The contents of this website should be regarded only as a guide and no action should be taken before obtaining detailed professional advice. No responsibility can be accepted for any action taken as a result of the information contained.