Phone:01570 423 823 | post@cyfri.co.uk
Annuities
What is an annuity?
An annuity is a type of insurance which enables the policyholder to enjoy a regular income in exchange for a lump sum of cash. This lump sum is built up through a pension scheme, and those with a pension must buy an annuity by the time they reach the age of 75. Those on final salary schemes with a work's pension may not have to do this.
The amount that you are paid as part of your regular income is dependant on the insurer's estimation of how long you will live, the annuity rates, and the amount of your pension fund.
What are the advantages?
- Provision of a regular income upon retirement
- Choice of annuities available to suit your needs - Joint life annuities available
- Income paid at intervals to meet your needs
The advantages and benefits will depend upon the type of annuity you select. We recommend that you research this subject very closely and consult us prior to selecting an annuity to ensure that you get the one that best meets your needs and circumstances.
What are the disadvantages?
- Lower rates on annuities for women, due to increased expected life span
- Falling annuity rates could reduce the amount that you receive from your pension
- Not very flexible, and unless you have selected a flexible scheme, you could be tied to the policy
The disadvantages will also depend upon the type of annuity you select. We recommend that you research this subject very closely and consult us prior to selecting an annuity to ensure that you get the one that best meets your needs and circumstances.
Important note
Remember that you must buy an annuity by the time you reach the age of seventy-five, but until then you may have other options with regards to enjoying a retirement income. If you do decide to buy an annuity upon retirement, you should ensure that you check policies, rates, restrictions, and benefits very carefully, and if necessary seek advice from an independent financial adviser. Investing in the wrong annuity scheme could cost you a great deal in annual income, so make sure that you look into this subject carefully before you make any commitment.
The value of your investment and income from it is not guaranteed it can go down as well as up due to fluctuations in investment markets, and you may not get back the full amount invested.
Levels and bases of and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor
Pensions Enquiry
Company address: Cyfri Cyfyngedig - 23 College Street, Lampeter, Ceredigion, SA48 7DY
T: 01570 423 823
F: 08709 223 296
Email: post@cyfri.co.uk
Registration address as company address
Registration number: 03925755
Registered in: Wales
For Investment Planning we make recommendations based upon the Whole of Market.
The levels, bases and reliefs of taxation are subject to change.
The guidance provided within this website is subject to the UK regulatory regime and is, therefore, primarily targeted at consumers based in the UK. This site does not confer any form of personalised financial advice, should you wish to receive specific financial advice please contact us.
Cyfri Cyfyngedig is an appointed representative of The M&E Network Ltd, which is authorised and regulated by the Financial Services Authority. The M&E Network Ltd is entered on the FSA register under reference 150643.