At retirement, you can buy an Annuity with your pension pot. An Annuity will pay you a regular income, usually for life.

Should you buy an Annuity?

Until recently, most people used their pension pots to buy an annuity. It has the key advantage of providing certainty of your retirement income, but it is questionable whether annuities are good value for money. As a result, the Government intends to change the pension rules from April 2015, so that you can use your pension pot in any way you wish from age 55. You will have far more options and so it’s vital that you get advice before deciding whether an annuity is right for you.

Key questions when buying an Annuity

Some of the key questions to be considered are:

  • Lifetime or fixed term Annuity?
  • Single life or joint life Annuity?
  • Fixed income, escalating income or investment-linked income?
  • Impaired Annuity?
  • Guaranteed payment period?

When purchasing an Annuity it is very important to shop around to get the one that best suits your needs at the best price. You will normally buy only one annuity with your pension pot so getting your choice right is crucial. To make sure you make the right choice, we strongly advise that you seek professional advice from a fully qualified and regulated Independent Financial Advisor. To arrange for a no obligations, initial free telephone consultation click here.