Annuities are a guaranteed source of income usually for the rest of your life. On reaching retirement, most people have a lump sum they have saved through a work pension or a personal pension plan, but it can be hard to budget how much you should spend each year. Investing the cash in an annuity enables you to budget properly and helps you avoid spending the cash too quickly.
The Government insists that anyone with a pension fund must use it to buy an annuity by the age of 75. You can take up a quarter of the money tax-free as a lump sum, but the rest must be invested in an annuity.
Seeking advice on annuities is critical because:
1. You do not have to buy your annuity from your existing pension provider
2. Once bought, your annuity cannot be changed
3. You could qualify for enhanced rates which means you may receive a higher income.
At GEM we provide a personalised and thoroughly independent service that sources the best annuity policy for you. This is one financial mistake you can't afford to make.
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© Gem & Co Financial Services LLP 2009