Make the most of your retirement income be sure to shop around to get a better rate.
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.
Once you’ve chosen your annuity, there’s no turning back – so making the right decision is essential. Here’s how Moneyfacts Annuity Service can help you:
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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.
You may also know that once you buy an annuity, it can’t be cancelled, so the decision to buy an annuity is final.
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 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 rates providing help with the following:
Providers of standard annuities offer different rates largely based on age. But many people – estimate nearly 60%** – may have a condition that could qualify for enhanced annuity rates.
If you qualify for an enhanced annuity, you could increase your pension income by as much as 40%* (depending on your health and lifestyle conditions). 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. These may include:
If you feel you might qualify for another condition it is worth giving us a call or visiting the Moneyfacts Annuity Service.
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).
However, under new rules following the March 2014 budget, if your pension pots across all your arrangements total £30,000 or less, and you are aged 60 and over you, can take the whole of it as a lump sum, which is an increase from £18,000. Small pots up to £10,000 can also be taken as a lump sum (up to three such pots). This is known as 'trivial commutation'. To find out more, visit www.hmrc.gov.uk/pensionschemes/small-pen.htm
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. The maximum income you can take is set currently within government limits, although the March 2014 budget statement proposed to remove these limits from April 2015.
Our partner Just Retirement have 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, 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: 25/04/2014. 40% is achieved by comparing the lowest standard annuity rate against the best enhanced rate for a person who has specific medical conditions: diagnosed with bowel cancer 2 years ago, treated with surgery and takes 2 medications daily. 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 and no value protection, which have been obtained from Premier Retirement Services. 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.
** Just Retirement Research April 2013
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
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