*Lines are open Monday to Friday, except Bank Holidays, 9am to 8pm. Calls are charged at local rates and may be recorded or monitored
Moneyfacts.co.uk has chosen Just Retirement Solutions to offer an annuity comparison service. Any legal or contractual relationship will be with Just Retirement.
Shopping around for an annuity can seem daunting, but if you wish to benefit from a guaranteed income for life, an annuity could be the way forward.
Getting your annuity to match your income requirements is a big decision. Here’s how the Moneyfacts Annuity Service can help you.
It is a common misconception that you can only purchase your annuity from your pension provider. However, if you shop around you could increase your retirement income.
Buying an annuity is an important decision so
you want to ensure that you choose one that provides an income to meet your
What income you will get from your pension pot will vary based on a number of factors including how big your pot is, to which options you decide to include in your annuity. These include whether you want an income that increases over time or not, and whether you want to ensure any dependents have some income should you die before them.
The Moneyfacts Annuity Service is a non-advised comparison service that could help you get up to 40%* more retirement income.
Our Online Annuity Planner will also assist you while shopping around for a better annuity providing help with the following:
Providers of standard annuities offer different rates largely based on age. But many people may have a health condition or lifestyle that could qualify for an enhanced annuity.
If you qualify for an enhanced annuity, you could increase your pension income by as much as 40%* (depending on your health and lifestyle). To help you make the right decision, Moneyfacts Annuity Service can help you by comparing annuity rates from standard and enhanced annuity providers quickly and easily.
There’s a range of health and lifestyle conditions that are considered by enhanced annuity providers.
Answer the following questions to see if you qualify for an enhancement:
If you feel you might qualify for another condition it is worth giving us a call or visiting the Moneyfacts Annuity Service.
The government has removed the restrictions on what you can do with your pension savings. This means that you will be able to choose the option that’s right for you.
Pension Wise is a new government service that offers people approaching retirement free, impartial guidance about their choices. You can receive Pension Wise guidance online, over the phone or face to face.
Pension Wise will provide tailored guidance to explain what options you have and help you think about how to make best use of your pension savings. It will offer information about the tax implications of different options and other important things you should think about, as well as tips on how to get the best deal, including how to shop around.
Choosing what to do with your pension savings is an important financial decision and it is often possible to get more for your money by shopping around.
If you have decided to use your pension pot to secure yourself a lifetime income, the Moneyfacts Annuity Service (a non-advised comparison service) is here to help you shop around and compare rates from some of the leading annuity providers. The service could help you get up to 40%* more retirement income.
Receive 25% of your fund tax-free
You are usually permitted to take up to 25% of your pension fund at the start of your retirement as a tax free lump sum. This is known as the Pension Commencement Lump Sum (PCLS).
Since April 2015 you can now choose to take your entire pension pot or pots as a lump sum, however your tax-free entitlement remains at 25%. The remainder will be taxed as income at your marginal rate, which could potentially mean being taxed at 40% or even 45% if your pension pot is large, or you have other taxable earnings in the same tax year.
New rules for small pots
If you have a number of small pension arrangements (small pots), you may be able to take some, or all, of these as cash lump sums. Up to 3 private small pots of up to £10,000 can be taken as a lump sum. If you have small workplace pensions (up to £10,000), there is no limit on how many you can take as lump sums**. You should be aware that 25% of each payment would be tax-free, and the rest taxed as if it were pension income. To find out more, visit www.gov.uk/personal-pensions-your-rights/how-your-pension-is-paid
If you do choose to take your entire pension pot or pots as a lump sum, this will not increase your tax-free entitlement. Therefore your tax-free entitlement will remain at 25%. The remainder will be taxed as income.
You can also leave your pension invested using a product called a drawdown pension. A drawdown pension allows you to draw some income from your pension fund as an alternative to taking out an annuity. There is now no limit on how much you take out of your pension in this way.
The new pension freedoms also introduced a further method of accessing pension benefits as one or more lump sum payments. These are called Uncrystallised Funds Pension Lump Sums (UFPLS).
With both drawdown and UFPLS 25% of the fund is available tax free and the remainder is taxed.
Taxation of death benefits
From April 2015, the taxation of death benefits on pension funds has changed.
The changes apply to drawdown pensions, and annuities that have “value protection” or a payment guarantee included as an option. This means that on death before age 75, a lump sum benefit from a drawdown or value protected annuity will be paid to any beneficiary tax-free. If death occurs after age 75, the payment will be taxed at 45%. This will then change to being the recipient’s income tax rate from 2016/2017.
If a dependants pension has been chosen rather than a lump sum, to continue the income in the event of death, the income will then be tax-free for annuities and drawdown, however if death occurs after age 75 the recipient’s payment will be subject to income tax.
Our partner, Just Retirement Solutions Limited, has created a guide to buying an annuity. The guide will help you to consider the financial choices that can lead to your money going that bit further in retirement.
The guide will help you to:
Click here to download your FREE guide to buying an annuity
Our handy online tool takes you through your choices in retirement, helps you learn about annuities and compare the latest annuity rates from a range of providers.
Once you’ve chosen your retirement income options, we’ll manage the entire process on your behalf, ensuring you receive the retirement income you deserve hassle free.
Click here to try Moneyfacts Annuity Service
*Source date: 29/09/2015. 40% is achieved by comparing the lowest standard annuity rate against the best enhanced rate for a person who has been diagnosed as having bowel cancer, stage 2, diagnosed 2 years ago and has had surgery, chemo and radiotherapy. Quotes are based on a RH2 7RT postcode, for a 65 year old individual with a pension pot of £25,000 with a 5 year guaranteed period, no escalation, no value protection and paid monthly in advance, which have been obtained from a representative sample of providers via Just Retirement Solutions Limited. The comparison is based on rates available via the open market option only and it should be noted that smaller increases will be achieved for less serious medical or lifestyle conditions.
** HM Revenue & Customs Pensions Flexibility 2015
Annuity service reviews - we asked customers who used the Moneyfacts Annuity Service, during 2012, what they thought of the website and whether we helped them get more income in retirement. Click here to read their testimonials.
Annuity jargon guide - we've compiled a jargon buster for some of the common terms you are likely to hear.
More annuity guides
Moneyfacts.co.uk Limited (Registered in England and Wales, No. 6615303). Registered office: Moneyfacts House, 66-70 Thorpe Road, Norwich NR1 1BJ. Moneyfacts.co.uk Limited is authorised and Regulated by the Financial Conduct Authority.
The Moneyfacts Annuity Service is provided by Just Retirement Solutions Limited. Registered office: Vale House, Roebuck Close, Bancroft Road, Reigate, Surrey RH2 7RU. Registered in England No. 05125701. Just Retirement Solutions Limited is authorised and regulated by the Financial Conduct Authority. Please note your call may be monitored and recorded.
Stay in the know with all the latest information, of-the-moment consumer trends, best-in-class products & providers and helpful tools from Moneyfacts.
Who pays into your workplace pension?Since October 2012 employers have been required to enroll Workplace Pensions workers into a workplace pension. Who will be automatically enrolled?
Avoid Running out of Money During RetirementMinimise the risk of running out of money. Download this FREE guide and ensure you accumulate enough wealth for a comfortable retirement.
Unlocking Equity in your HomeEquity Release schemes allows homeowners over 55 to unlock the money that's tied up in your home, to provide a regular income, or a lump sum payment. Read more
Reports of the rising popularity of annuities will no doubt come as welcome news, but what won’t be ... More
Last week we reported that annuities were coming back into fashion, and today we have yet more evide... More
The launch of the pension freedoms led many to predict the end of annuities, and for a while that lo... More
Annuities were dealt a huge blow with the launch of the pension freedoms, but it seems that the tide... More
Our new research shows that 2015 was another poor year for annuity rates, as uncertainty created by ... More
An enhanced annuity can pay you far more in retirement. There are many factors that affect how much ... More
Don’t settle for the annuity quote your pension provider offers! Make sure you shop around and find ... More
As you get a bit older, as well as getting wiser, you hopefully get a bit wealthier too! Ideally the... More
Norwich & Peterborough Building Society has increased the rate on its two-year fixed mortgage by 0.1... More
Penrith Building Society has unveiled a new one-year variable rate bond, which has been awarded an ‘... More
Nationwide Building Society has cut the rate on its two-year variable tracker mortgage by 0.45%, mak... More
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.