At some point during the first years of retirement, some people choose to use the money that they have saved into their pension scheme during their working life to buy an annuity from an insurance company. This is a transaction that occurs only once.
The money that you pay to the insurance company is in exchange for an arrangement where the insurance company provides a yearly income. The income is guaranteed at least for the rest of the pension scheme member’s life with the amount you are paid dependent on your initial payment as well an estimation of your life expectancy by the insurer and current annuity rates.
Your pension company may offer you an annuity, but there are a number of options available to you and we can help you to shop around to identify the right option for your.
Annuities can be a benefit as they guarantee a regular income for life but there are some restrictions and influencing factors such as the insurer’s estimation of your life expectancy and the current state of the economy. It’s important to consider which annuity you buy dependant on your circumstances and we can help you to review your options. The advantages and disadvantages of an annuity depend on the type of annuity you opt for and your specific needs.
*The value of pension and the income they produce can fall as well as rise. You may get back less than you invested.