If you are due to retire you have a number of key decisions to make concerning your pension income. Normally you should start to consider these within 6 months of the retirement date. Traditionally an annuity has been the primary option and is in many cases the lowest risk.
So, what is an annuity? An annuity is a guaranteed income for the rest of your life which has been bought by all or part of your pension fund. This amount of money can be paid at a level amount, an increasing amount, with a widow’s clause or with a fixed term guarantee. In the main once the money is invested it remains with the annuity provider and you receive your income. It is not subject to market fluctuations and you do not have to worry whether you will receive that payment each month. Although there are many positive sides to an annuity, recent low interest rates have affected the return you can expect to receive for your money and of course once the money has gone into the annuity pot it cannot be returned to you.
A large percentage of the retiring populous will buy an annuity with their current pension provider unaware that the open market could possibly give them a greater income for the same investment amount. Most notably if you have an unusual lifestyle or are not in full health you could qualify for an enhanced annuity meaning your payments are higher again than that of the current market.
At Romilly Financial we examine your options, discuss your requirements and then research the market on your behalf making sure we secure the best possible rate for your annuity investment.