Tag Archives: Annuity

Annuity Advisers Will Always Err on the Side of Safety

For those interested in using their pension saving funds to invest in an annuity, the annuity market has several different options – both in terms of products as well as providers. An annuity once purchased cannot be reversed, so it is strongly recommended that you shop around and explore the open market before making a decision. There are a number of resources and tools available today to help people understand the annuity market. Many people also consult Annuity Advisers for guidance and advice.

Independent financial advisers and financial experts can offer impartial guidance and help you understand different options that may be available to you. They could help you understand your own financial needs, particularly future needs, and help you make the right decision that can serve you well over the long term.

In general, annuity advisors and independent financial advisors tend to err on the side of caution and suggest options that are safer rather than riskier alternatives. This is because of two main reasons.

The first reason is that annuity advisors and financial advisors have been trained to be cautious and to play it safe when it comes to their clients. After all, it is their job to help people make sound financial decisions that can pay off in the long term. It is not their job to help their clients take unnecessary risks and gamble their long term financial security on potentially unsafe investments.

The second reason is also related to this. The fact is that financial advice is a tricky area. The position of annuity advisors and independent financial advisors is one of great responsibility. Giving the wrong advice or advising a client to take an unnecessary risk without fully explaining the consequences is akin to professional suicide on the part of the advisor.

The fact is that they have to be cautious and this is because the wrong advice could result in them getting sued. If a client feels that they have received wrong advice from their annuity advisors or independent financial advisors, and have suffered damages as a result of this advice, they can in fact sue the individual advisor or their company.

In fact, the Financial Conduct Authority protects customers and could even offer compensation to the client through the Financial Services Compensation Scheme for the wrongdoings of annuity advisors and IFAs. The FSCS is a last port of call for customers of authorised financial services firms.

How to Find Out Your Annuity Fund

We are living for longer today than ever before. At the same time, the cost of living is ever rising. Changing social and economic factors mean that planning your finances during retirement has become more important than ever before. After all, retirement is known as the golden period, when one should be able to enjoy the fruits of life’s labour. It is therefore vital to plan carefully and optimise your financial assets to provide for you when you stop working. Things like annuity value prove to be immensely significant during retirement, as an annuity is one of the most important, and often the only source of income for pensioners.

An annuity provides a regular and steady income in exchange for a lump sum. People usually invest their pension savings into an annuity scheme, which then pays out an income either for as long as you live, or for a pre-agreed period of time. How much income an annuity can offer you, or annuity value, depends on the size of your Annuity Fund, which is the amount invested in the annuity, as well as various other factors.

The most important factors that determines annuity value is the type of annuity you choose to invest in and the current annuity rates. Other factors include age, gender, and location. Depending on your health and lifestyle, you could also be eligible for an enhanced annuity, which has a higher annuity value based on the shorter than average life expectancy of the applicant.

Often an annuity is the only source of income during retirement, and so choosing the right annuity with sufficient annuity value is extremely important. Once you buy an annuity it cannot be changed or cancelled – so it is important to make the correct decision the first time around. An annuity offers a chance to make the most of your life savings, but choosing an annuity that underperforms or does not suit your needs could mean losing your life savings to an ineffective investment.

It is imperative to shop around and use the open market option to find the most suitable annuity with a sufficient annuity value. You can consult an independent financial advisor with expertise in the retirement sector to understand the implications of investing in different types of annuities and choosing the best option. You can also use online tools like annuity calculators etc. to find out the best annuity value you could get in exchange for your annuity fund.

What if the Annuity Payable Exceeds My Care Fees?

An immediate needs annuity is a product designed to help those already in care to meet the costs of long term care. The annuity, in exchange for a lump sum fund makes guaranteed payments towards care until the end of life. The payments are tax free so long as they are paid to a recognised care provider.

One of the main concerns that people have about immediate care annuities is that the amount to be paid out is fixed and does not change over time. This means that even if the cost of care increases, the amount payable through the annuity remains constant, and any difference must be met by the client.

A flip side of this scenario is if the cost of care reduces for any reason. The two main reasons that the cost of long term care could reduce over time is because of a change of residential care home or nursing home, or because you are awarded registered nursing care contribution from the NHS.

In case the amount paid by a care annuity exceeds the cost of your care, then it may be possible to convert your immediate needs annuity to a purchased life annuity. This will enable you to receive the additional payments. However, it is important to note that this additional income will be taxable by the Inland Revenue at the savings rate of 20%.

The tax rate applicable is that of the income bracket into which you will fall. Your total income from all sources will be considered, and this will include any other annuities, savings and investments. If you fall into a higher tax bracket, then the additional annuity payment will be charged at a higher rate.

A care annuity is a niche financial product designed to meet very specific needs. It is designed for those faced with the prospect of potentially unending costs of care, and who also want to protect their savings and assets from being corroded by care costs.

If you are considering opting for an immediate needs annuity to meet the costs of on-going care, it is important to seek advice from a qualified financial advisor who can give you impartial and objective advice not only about whether it is the right option for you, but also advise you about the different implications of having an immediate needs annuity.

Annuity Rules Are The Biggest Misconception

An annuity is an important tool in the retirement sector, which allows you to draw your pension fund as regular income during retirement. Investing your hard earned life savings into an annuity is a very important decision indeed, and it is vital to shop around not only for the most suitable annuity type, but also for the most suitable annuity provider for you.

The biggest misconception when it comes to annuities is that one is required to set up an annuity with their pension provider. The truth is that thanks to the open market option, there is absolutely no need to be limited to your pension provider for an annuity. In fact, the Government is trying to encourage people to use the open market option and shop around for the best annuity deal before investing.

Annuity rates can vary very widely between providers. Also, the variety of annuity products available means that different annuities will have different rates even from a single provider. So a company that offers the best rates with one type of annuity may not necessarily do so with a different type of annuity.

The first step towards finding the right annuity, therefore, is to understand your own needs and find out what type of annuity works best for you. For instance, would you need a single life annuity, or a joint annuity? Would you rather have a guaranteed income for life, or invest in a higher risk investment linked annuity? Would you need a fixed annuity with fixed payments for life, or an escalating annuity? These are some of the questions that need to be answered before you can shop around for the best annuity quote.

Your pension provider is bound to offer a quote, and there is no reason why you should not consider this quote, as there is every possibility that it will not only be competitive but may even be better than the open market options. The point is not to limit your options, but to shop around and make an informed choice about this important step in life.

The Financial Services Authority has worked hard to ensure that pensioners have the right to exercise an open market option and shop around for annuity quotes. The FSA continues to encourage people to use this option and has also made it mandatory for your pension provider to remind you of this option while offering a quote. That you must purchase an annuity from your pension provider is a myth, but thankfully, one that is continuing to diminish rapidly.

Why Look For Annuity Quotes Online?

Planning for your retirement is probably one of the most involving tasks. However, there are several, simple options that can save you a lot of money and time, while helping you to secure a future income. One such option are annuities. Like any other product, it is advisable to shop around for the best deals before making a purchase.

Shopping around for the best annuity deal has been made easier with the advent of the internet. Therefore, the better annuity providers have decided to make the search easier and cheaper by giving out annuity quotes online. Therefore, you can compare different quotes and pick the one that best suits you.

If you are an investment novice, you will find online annuity providers especially helpful. This is because you will get adequate information about annuities to help you make an informed choice. Online resources will explain the different types of annuities, and who is best suited to take a particular annuity. With this information and annuity quotes, you can choose the plan that best suits your current financial situation while guaranteeing your desirable future income.

Online annuity providers also give you tips on how to reduce your expenses. For example, they know when you can be tax exempt, and when you can receive higher annuity income, and can therefore advice on the appropriate plan for your lifestyle. For example, if you suffer from a terminal disease or life threatening condition such as diabetes, you are better off with an impaired pension plan.

The best thing about shopping for the best annuity quotes online is that it is convenient and affordable. Can you imagine what it would be like travelling to different places looking for quotes from the best companies? Well, these days, all you need is to use the numerous sites equipped with an annuity calculator.

When using an online annuity calculator tool, it is advisable to give all the necessary details so as to get the best quote. This is especially helpful because you can get a good quote without revealing your identity. Online annuity calculator allows you to shop for the best rate anonymously, which saves you tones of spam mails. Additionally, you get to check out different sites and get a rough average of the quote an annuity provider is likely to offer you based on your personal information.

Regardless of your reasons for choosing annuities as your retirement investment option, you will realize that shopping online is extremely convenient.

Call 0800 678 5139 to request your annuity quotes today.

Inheritance Considerations when Choosing an Annuity

Choosing the right annuity can be a very big and impactful decision for most consumers. For most, making the wrong decision can be very costly and is truly not an option. With so many options available, choosing an annuity can be a very difficult decision and can be a decision that is accompanied by a great many repercussions if the right one isn’t made.

While choosing an annuity is an important decision, it is compounded by the idea that it is equally challenging for the consumer as it is important.  There are several different options available to the consumer when choosing an annuity. This includes several different types of annuities, all of which offer different enhancements and add-ons. Each one of these annuities has its own distinct set of advantages and disadvantages. Because each consumer has a unique situation, choosing an annuity can be a challenging concept, especially with so many different options available. Knowing exactly what is needed is the first step for every consumer as they look to decide how they should invest in order to ensure a comfortable retirement.

Some consumers are not just making a financial decision for themselves. Instead, they look to ensure that their dependents, spouse or close family and friends will also be financially stable in the future. For these consumers, there are unique options available, some of which are more expensive, that ensure that other beneficiaries can be listed on the annuity in the event of the death of the annuitant. Other consumers have a unique need for their annuity income. For some, it is truly a form of regular income off which to live. For others, it is income that is earmarked for various activities. Depending on what the income is used for, consumers might find that one kind of annuity works better than another. Lastly, for those consumers who are using the annuity income as a true way of living during retirement, there may be a need to save a certain amount of money in their pension. This means that the consumer might know exactly what their expenses will be once they retire and therefore, they may know exactly what they need from their annuity income. This means that they can tailor their annuity to ensure that the income they need is received based on what they are able to save in their pension fund.

Every consumer has different needs and choosing an annuity can be a challenging decision. However, because there are so many options available, there is often more than likely a perfect fit for those consumers who are looking to fund their retirement with an annuity.

The Facts about Annuities

The number of consumers looking to finance their retirement years with the help of an annuity continues to grow. Annuities provide a sense of stability and security for consumers as they age out of their working years and allow some sense of financial freedom for those who are looking to enjoy their retirement. However, consumers need to know all of the facts about annuities before they embark on an investment. These facts about annuities can be learned through an independent financial adviser or even through independent research by the consumer. Either way, it is important for consumers to get all the facts about annuities before choosing the right option for them for their retirement, similar to engaging in any other investment strategy.

There are several different types of annuities, all of which have different eligibility factors and qualifying guidelines. The facts about annuities varies between type of annuity which is why it is critical for the consumer to do as much research as possible before making any determination on how they would like to invest their money for the future and for their retirement.

Different Types of Annuities

There are several different types of annuities available for consumers, all of which have different factors and guidelines. There are enhanced annuities available for those consumers who have a documented illness that may shorten their life expectancy. This specific annuity requires documentation of the illness in order to qualify. There are also conventional annuities for those consumers who are mainly focused on having a guaranteed stream of income throughout their retirement. For those who want income for only a short period of time there are fixed term annuities available that will make payments for only a designated period of time. And for those who would like to try their shot at earning money during retirement, there are annuities that can be linked to designated investments in the financial markets. Regardless of the choice, consumers should be educated on the exact facts about annuities, and each type, before investing.

Annuity Rate Factors

Not only do consumers need to know the basic facts about annuities, but they also need to aware of how their annuity rate will be calculated. The amount that consumers can expect to receive from their annuity depends on several factors. The first of these factors is savings. Part of the annuity rate will depend on how much the consumer has managed to save in their pension pot. Secondly, where the consumer lives will impact their annuity rate. Providers can base annuity rates on the mortality rates associated with different parts of the UK. Health of the consumer will also be factored in to their annuity rate. If the consumer is in poor health not only may they qualify for an enhanced annuity but they may also receive a higher rate because the insurer assumes that they will not be making payments for as long as they would if the consumer were healthy. Lastly, the consumer’s annuity rate could be affected by the current rates offered by other annuity providers. This is basic competition in the market. If insurers need to compete for business, they will most likely keep their rates competitive to attract more business.

Consumers should know all of the facts about annuities before they decide to invest. This not only means becoming educated on what is available but also becoming educated on what factors may influence their annuity rate, and therefore, their income stream. Knowing all of the facts about annuities can only serve to help the consumer plan for their future and their plans once they retire.