An Annuity is an ‘income for life’ arrangement exchanged for the cash that has been built up in your pension fund. There are basically two types of annuity; a Conventional Annuity that is guaranteed (irrespective of investment returns or life expectancy) and one that is Investment Linked (subject to investment returns). There are a number of optional features that can be built in. In general, the more features you use the lower your income.
Joint Life: Where you can have up to 100% of your annuity income to continue in event of your death for your spouse or partner.
Guaranteed Period: Incorporates a time guarantee for how long your income will be paid regardless of if and when you die.
Indexed: Where you opt for an incremental increase in your income each year
Inflation Linked: Where an annual increase is linked to the rate of inflation
Impaired Life/Enhanced: Health and or medical problems, past or present, can qualify you for better rates dependant upon the severity and nature of the problem. Includes smoking and Obesity rates.
Protected Rights/GMP: These are benefits from opting out of the second State Pension (SERP’s) and are more prescriptive.
An important part of our work on your behalf is help and guidance with respect to the Open Market Option (OMO). Our independent status means we can review the whole annuity market place to find the best rate with the features and options you require. The OMO is where you (the annuitant) are free to buy your annuity income from any annuity provider available; you are not tied into using your pension fund provider. This would apply to any additional funds you have as the NHS Pension, as an occupational scheme, has a Compulsory Purchase Annuity from the scheme providers.
Making the right decision about this is very important as once an annuity income is purchased the provider and the type, rate, features and options of the plan cannot be altered in any way.
Ensure you exercise your rights through our OMO Advisory Service and make sure you get the best Annuity income and benefits your hard earned savings can buy. Ring us on 0845-6756749 or clicking here now.