Waterfront Wills and Estate Planning

Do NOT transfer your pension fund into an annuity before you have researched the Open Market to see if your current provider is offering you LESS than you may be entitled to.

Benefit from our FREE open market report on what income the value of your pension fund(s) could get you.

The marketplace for purchasing an annuity (the process whereby you hand over some or all of your pension fund to buy an income for life in retirement) is becoming increasingly complicated.

You therefore need an independent view of products offered by providers of annuities if you are to get to the right solution for your retirement needs.

With interest rates for annuities falling (It may be that you can defer buying an annuity and still take the tax free cash element of your pension), and continuing to do so, it is right to consider that ffalling annuity rates could prove a greater long term risk than stock market volatility for people about to retire, aswell as those already retired.

Some annuity advisers are experiencing a surge of calls from people looking to delay annuity purchase as they panic about the effect of market volatility on their pension fund.*

While the FTSE 100 has slumped 12% in the past two months annuity rates have fallen around 3% during the same period. This means an average £100,000 fund now generates £6,624 a year compared with £6,831 - an annual loss of £207. This can cause an income loss of £5,000 over 25 years. *

Analysts predict further falls in annuity rates - they have dropped 20% in the last three years. *

You may be entitled to a higher annuity if you or your spouse smoke or are taking prescription medication for conditions such as high blood pressure or high cholesterol. This is not always the case but we will investigate this option for you.

For the majority of pension funds, there is an element of the fund which can be taken as a tax-free lump sum

Normally this is a maximum of 25% of the fund. This means that you can choose to receive an amount up to 25% of the fund as a tax-free payment, and the rest is then used to purchase an annuity for you.

It is important to know that some pension plans allow different amounts of the total fund to be taken as a tax-free lump sum.

We will investigate this for you, together with the potential for guaranteed annuity rates applied to your exiting pension(s). This could be an important benefit, providing a minimum level of income in retirement. However, there may be restrictions attached to the rate.

These are all reasons why it is best to seek professional advice before purchasing an annuity.