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Annuities
Frequently asked questions for Annuities
Click on the links below to find the answers to each question.
How can I be sure I’m choosing the right annuity?
Converting your pension fund into a regular income is one of the most important financial decisions you’ll make in your life. You don’t have to make a choice until you’re coming up to your chosen pension age; however it’s useful to understand your options. It’s particularly important to understand that, once you buy an annuity, its terms usually can’t be changed.
Making the right choice depends on a number of factors, including whether you have a spouse, civil partner or dependants, and your health. Remember, you don’t have to decide until you are approaching the age you want to start to convert your pension fund into an income. You should certainly consider consulting a Financial Adviser.
Can I choose when to buy my annuity?
Yes. Currently, you can decide to buy an annuity from age 55, even if you’re still working.
How is it taxed?
We deduct income tax from your annuity payment on your behalf. Your Tax Office sends us your tax code number, and tells us how much tax to deduct (taking into account your personal allowances). At the end of the tax year you’ll get a P60 showing your pension and the tax taken off. You should keep this in case you have to fill in a tax return or need to claim tax back from HM Revenue & Customs. Tax rules can change.
Why do you pay different amounts of pension income to men and women of the same age?
On average, female pensioners are expected to live longer than male pensioners and this is currently reflected in the differing amount of pension income paid to males and females who are the same age at retirement and who have the same pension fund. However, equal pension incomes for men and women of the same age are expected to apply from some point in 2012 as a result of legislative change. Further information.
Have we answered all your questions?
We hope you have found this summary of frequently asked questions helpful. If you have any further questions please contact us.
