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Frequently asked questions about Pension annuities..

 

What’s the difference between advance and arrears?

Advance is paid at the start date of the Pension Annuity. Arrears is at the end of your chosen payment period.

 

What’s the difference between Guarantee period and Joint policy?

A joint policy, upon your death, will pay an income to the dependent, at the same amount or at a reduced amount, for the rest of their life. A guarantee period can be chosen from 1 to 10 years at the start of the policy, if you die within this period the Pension Annuity payments will continue to the end of the guarantee period, and are paid to your estate.

 

What is a Pension Annuity?

A life time Pension Annuity is a financial product which you buy at retirement with a UK Pension fund. The Pension Annuity will pay a retirement income to the annuitant for the whole of their life. There are many Pension Annuity providers which offer annuities but they all offer different Pension Annuity rates depending on the customers circumstances at retirement time.

 

What is the difference between Retirment income drawdown and a Pension Annuity

The main difference to an Pension Annuity is that the money you receive is guaranteed for the rest of your life, where an Retirment income drawdown is a variable amount dependant on many factors how much your draw down where you invest the money. If you do require an income draw down we strongly recommend you seek financial advice.

 

What is the difference between a annuity and a Pension annuity?

There is no difference at all it is just terminology annuity is called a lot of different names just to confuse everyone. Here is a list of names which is use to offer a annuity; Pension, Pension Annuity, Lifetime annuity, Enhanced annuity, Impaired annuity, standard annuity, conventional annuity, investment linked annuity, with profits annuity, guaranteed annuity and fixed term annuity. 

 

Do you charge me a fee for your Pension Annuity service?

We never charge our Pension Annuity customers a fee for our service we receive commission from the Pension Annuity provider you chose to go with. The commission we receive is set at a Annuity standard rate with each of the providers.

 

 

Does your commission effect my annuity rate?

The commission that we receive will not reduce the Pension Annuity rate that you receive from the providers.

The default rate is used with the all Pension Annuity providers.

 

Would I be better deferring my annuity

How certain are you that Pension Annuity rates will improve within this period? Between December 1999 to June 2007 Pension Annuity rates for single males declined by almost 20%. Pension Annuity rates can fall because of increasing life expectancy over the long term. In the last 3 decades, life expectancy for a male at age 65 has risen by 3 years per decade. They can also fall because interest rates fall. Pension Annuity rates can increase as well by making sure you get the most appropriate Pension Annuity product for your retirement . Because sometime customer don’t have the luxury been able to wait to see if Pension Annuity rates increase.

 

What is open market option?

An open market option provides the ability for the Pension Annuity buyer to use their Pension fund to purchase an annuity from any annuity provider. The buyer can search the whole of the market for the best and most appropriate rate.

 

How can I buy a Pension Annuity?

You can buy an annuity a number of ways; through your Pension provider which will only give you a 20% chance of getting you the best Pension annuity rate; via an independent financial advisor (please be aware you may be charged a fee plus commission) or via a Annuity specialist who only deal with annuities. Pension Annuity UK is a Pension Annuity specialist and would welcome the opportunity to increase your Pension Annuity rate which will increase your retirement income.

 

Which Pension Annuity is the best Pension annuity for me?

A Pension Annuity is tailor made for you so it is very difficult to say which PensionAnnuity is best for you. You can get a rough idea from Pension Annuity tables, Pension Annuity calculator, retirement calculators or quick Pension Annuity quote systems. Unfortunately none of these methods will give you an exact Pension Annuity rate. To obtain an exact pension Annuity rate we would need to discuss this with you as there are many different factors which wil change your Pension Annuity rate such as; your age, postcode, occupation, your requirements for retirement , if you are taking any medication, how much you drink, how much you smoke, if you have any medical conditions, your overall state of health;and then we have to do the same for any dependents. So as you can see it is not a just quick calculations, it is an in-depth process.

 

Which Pension Annuity provider has the top Pension Annuities?

Each Pension Annuity Provider will have a section of the market like standard Pension Annuities or Enhanced Pension Annuities and within each market section will pick criteria that they will be more competitive in. (i.e. a particular postcode or a certain medical conditions)   

 

I don’t want to speak to anyone can you send me the stuff in the post and I will do it my self

If you are not looking to reitre right now and are just shopping around you can use our Pension Annuity Tables. However if you are looking to reitre right now, we need to speak to you directly as we require detailed information to ensure we find you the right Pension Annuity. Our Level of service gives ou customers confidence in buiying a Pension Annuity by providing the right information. You can only buy a Pension Annuity once and we do not want customers to miss out on higher annuity rates. The whole process only takes up to 25 minutes and the types of qwuestions we ask are; age, postcode, occupation, your requirements for retirement , if you are taking any medication, how much you alchol drink, how much you smoke, if you have any medical conditions, your overall state of health and then we have to do the same for any dependents. So as you can see it is not a just quick calculations, it is an in-depth process.

 

How much is state Pension?

There are different types of State Pension and the rate you get depends on your circumstances. Your eligibility for Pension Credit also depends on your personal situation. Further information can be found at www.direct.gov.uk

 

What happens if the Pension Annuity provider goes bust ?

Every Pension Pension Annuity provider has to have a certain grading before they can operate, however because what has happen recently due to the recent credit crunch we can understand why people may be hesitant to invest their money. If for any reason the Pension Annuity provider goes bust the financial services compensation scheme (FSCS) with pay 90% of any claim with no upper limit.

 

Why does my husband get more than me?

Pension Annuity rates are calculated by actuaries using various factors - mortality rates, interest rates, age, gender and sometimes health. In general terms, Pension Annuity rates are higher the older a person is because future life expectancy is less. In the same way men get higher Pension Annuity rates than women of the same age due to men having lower-life expectancy.

 

 

How much tax free cash can I have?

25% tax free cash can be taken from a Pension, however there are some Pensions which allow more tax free cash to be taken. You should check with your Pension provider to see whether you have a protected lump sum. Who pays me a the tax free cash The tax free cash can be paid to you by your Pension provider or your chosen Pension Annuity provider. If you are transferring more than one Pension fund to an Pension Annuity provider they may need to receive the full fund and pay you the tax free cash.

 

What is a guaranteed Pension Annuity rate ?

A Guaranteed Pension Annuity rate, is a fixed rate, written into your Pension contract, at which you can convert your fund into an Pension Annuity, irrespective of what open market rates are doing at that time. There are normally some conditions written into the application of the guaranteed Pension Annuity rate. It is usually only available at the scheme's Selected retirement Age i.e. it will not apply if you retire early or if you retire late. It normally will only provide an Pension Annuity on your own life and often will not provide for post-retirement increases. The attraction and value of the guaranteed Pension Annuity rate is that it can produce a higher retirement income for life than any Pension Annuity rate available in the open market option.

 

What is non protected rights?

Non-Protected Rights is what has built up from you and/or your employer's contributions. Protected Rights fund is what has built up from the National Insurance rebate contributions arising because the scheme was contracted out of the State Earnings Related Pension Scheme.

 

What is protected rights ?

Protected Rights fund is what has built up from the National Insurance rebate contributions arising because the scheme was contracted out of the State Earnings Related Pension Scheme. Non-Protected Rights is what has built up from you and/or your employers contributions. (SERPS), State Second Pension (S2P)

 

What is an Enhanced Pension Annuity ?

An Enhanced Pension Annuity / Impaired life annuity pays an income for life in the same way as a Lifetime Pension Annuity. However, it pays a higher retirement income to those suffering with certain medical conditions on the basis that they have a reduced life expectancy. Medical conditions include, but are not limited to, high blood pressure, diabetes, heart conditions, kidney failure, certain types of cancer, multiple sclerosis and chronic asthma. This is not a comprehensive list. They also use factors such as whether you smoke, are overweight or have high cholesterol. An Pension Annuity provider will normally ask for a report from your doctor. They do this to make sure that the details in your application form are correct. If you are accepted for an Impaired life Pension Annuity, your income will be higher than from a conventional Pension Annuity because the annuity provider expects to pay your retirement income for a shorter period of time. This can make a substantial difference.

 

Do I have to buy an annuity?

In order to receive an income from your Pension fund you need to purchase another financial product, one of these products is a Lifetime / conventional / Impaired / Enhanced Pension Annuity which will give the annuitant a guaranteed income for life.

 

What is the difference between level and escalation

Level means Pension Annuity payments are the same throughout your life, they do not rise or fall each year. Escalation means your retirement income increases every year either at a fixed percentage chosen by you or in line with the Retail Price Index. Inflation generally means the cost of living rises. Escalation can offset this cost by opting to have your income increase every year