An annuity is a type of insurance policy that provides a regular income in exchange for a lump sum.
When you reach retirement you have to convert the capital built up in your personal pension policy into an annuity or draw down pension. You can take up to 25% of your pension pot as a tax-free lump sum.
Over the past few years, annuity rates have fallen sharply. You do not have to take the annuity offered by your existing pension company and this is called the open market option.
Annuity rates vary between companies so you need to check which one will give you the best deal which is where an Independent Financial Adviser can be invaluable.
If you have a reduced life expectancy due to medical or lifestyle reason you may be entitled to an Enhanced Annuity.
For instance,this may include habits such as smoking or drinking, medical history or lifestyle. If you are entitled to an Enhanced annuity you may receive up to 50% more income.
Invest Southwest are an award winning Independent Financial Advisers that offer pension advice . We are FCA approved and offer a free initial consultation to establish your needs.
If we can help with any of your needs do not hesitate to contact us on 01934 310653