An often asked question about pension annuities; can you top up your pension annuity for better UK annuity rates? Take the example of a male aged 60 thinking of combining two maturing pension arrangements, with Standard Life and Aviva, into one pension annuity with Aviva. He also has another policy with Sun Life which has gone down in value with the stockmarkets so he doesn’t want to use that one yet. The question here is if the pension fund from Sun Life rises in value in the next couple of years or so, will he be able to add this sum to the Aviva annuity pot or is that closed once an annuity is purchased.
Unfortunately, looking at the regulations on pensions and annuities, it isn’t possible to add additional funds to an annuity once payments have commenced. While many insurance companies might encourage him to amalgamate all pension funds to buy one annuity, this only works where all the benefits are being taken from the same date. Therefore, the Aviva and Standard Life funds can be amalgamated now to buy one pension annuity, hopefully with some of the better UK annuity rates, and, when he wishes to draw an income from the Sun Life plan, a new annuity will need to be taken out utilising those funds. The underlying pension annuity rate changes frequently and this is one reason why it is not possible to top up annuities after payments have commenced.
