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Provided by: Premier Retirement Services
You could increase your income in retirement by up to 40%* depending on your medical situation.
* The increases quoted are based on a 65 year old man with a £30,000 pension fund. Sourced on 07/02/2011. 17% is achieved by comparing a standard annuity rate against the best non-enhanced annuity rate. 40% is achieved by comparing the standard annuity rate against the best enhanced rate (example enhancement presumes person smokes and has medical conditions).
An annuity is a financial product that you buy when you retire. It is designed to provide a guaranteed income for the rest of your life.
Normally you'd buy an annuity with the money you've saved into your pension fund. You can choose to take up to 25% of your fund as tax-free cash, although this will mean you will receive a lower income in retirement.
Once bought, your annuity will then pay you an income (usually monthly) for the rest of your life. Income from an annuity is taxed and is usually paid net of basic rate tax. Higher rate taxpayers may be liable for additional tax.
Once purchased you cannot change your retirement annuity provider, so it's important to purchase the right product.
There are a number of factors that will affect the amount of income you'll receive in retirement. You could even qualify for an enhanced annuity. This will depend on:
Taking time to use our annuity comparison could increase the amount of income you receive for the rest of your life.
Annuity jargon guide - we've compiled a jargon buster for some of the common terms you are likely to hear.
More annuity guides