A pension annuity will come into play once you have retired. At this point you will have a number of options when it comes to investing your pension fund. You can choose to take up to 25% of your pension fund as a lump-sum. You will not have to pay tax on this and you will be able to use it anything such as an once-in-a-lifetime holiday or home improvements.
You can invest the remaining bulk of your fund in a pension annuity. This is a way of converting your pension fund into manageable income.
What Rates Are Available?
When it comes to pension annuity rates the market is diverse. These rates can be affected by a number of economic, political and financial factors. You will need to look at the market when you are getting ready to retire to see what rates are available.
You can check pension annuity rates online and also speak to an independent financial advisor for more advice.
Rates will vary across the market so you do need to shop around and compare as many products as possible.
Just opting for the first good deal you see could cost you. Figures show you could maximise your money if you take the time to compare products when looking at pension annuity rates.
Don’t forget pension annuity products are a type of insurance. This means your rate could be affected by risk factors.
For example if you are younger then you will be seen as a higher risk factor. This is because it is likely you will live longer and so the insurance company will have to pay out more to you over a longer period of time.
This means you could get less beneficial rates. You do have until you are 75 years old to invest your pension fund in an annuity.
This means in some cases it could be a good idea to wait until you are a bit older before you start looking at rates.
You could also get less beneficial rates if you are a woman in good overall health and statistically you could be expected to live for longer costing the insurance company more.
Get as much advice as you need when it comes to managing your retirement with pension annuity products. There are many competitive rates on the market and you will need to choose well to make the most of your money.
