It is often commented in news items that proper advice should be taken when you come to use your hard earned pension fund to buying a pension annuity and get the best annuity rate depending on your circumstances. There are some important points to consider: Is it the right time to buy your annuity? Rates do vary, and you can get more as you get older. How much income do you require? This ties in with, How much tax-free cash do you require - There is a maximum of 25% of the overall value of your pension fund, but taking less increases your pension income.
Do you want a single life annuity which stops when you die, or a joint life annuity which pays a pension income to your wife on your early death? Do you want a minimum payment guarantee period to give added protection should you die in the first, say, 5 or 10 years of drawing your pension? Do you want a pension income that stays level in payment, or one that increases over time, either at a fixed percentage or RPI ?
Do you want to consider an element of investment for your annuity and your pension fund that may give you future growth in value, i.e. with profits ? Do you smoke regularly, or have a lifestyle or medical condition that might effect how long you are expected to live ? This could result in a higher annuity being payable…up to one-third more. All very important issues that warrant consideration to ensure you get the best possible income at retirement.
