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Three Very Important Facts About Pension Annuities
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Posted On :
Dec-16-2010
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Article Word Count :
434
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Annuities come in various types and you need to do your research before you purchase them. There are some important options within annuities and you should consider these and how to find the best annuity rates.
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1. You might be able to take advantage of Trivial Pension rules
Triviality Rules allow those with smaller pension funds to take the entire amount as a cash lump sum.
If you are aged between 60 and 75 and your pension is less than 1% of the Standard Lifetime Allowance, you are able to take the fund in a single cash lump sum. As of October 2010, that would mean anyone with a total fund of Ł18,000 of less would be able to do so.
Even if you take the whole pension fund as a cash lump sum, only the first 25% will be tax free. You will be taxed on 75% of it. If you wish to cash in more than one pension in this way (assuming you meet the criteria for this to be permitted) you must do so within 12 months of cashing in the first one. As soon as you cash in one pension under Triviality Rules, you will only have 12 months in which to exercise the same rules to cash in any others. After this period, you will not be able to do so.
2. Shop around to find the best pension annuity rates
As you approach your retirement, you will, in all likelihood, hear from your pension provider with their offer for an annuity. However, you do not have to accept this offer.
The Open Market Option is now in place and what this means is that you have the right to shop around.
You can scour the market and find out what rates you could be offered by other providers and this could potentially to add up to thousands in extra income over the course of your retirement.
Your retirement finances are absolutely critical and, particularly in the case of an annuity that will not change for the rest of your life, ensuring you have the best you can possible get for your fund is essential. Different providers offer different rates and your offer could also be affected by your health and lifestyle habits.
3. Smokers can usually get higher annuity rates
There are many providers that will give significantly higher annuity rates to those that smoke; there are even some annuity providers that specialise in smoker annuities. Since annuities are based on estimated life expectancy and generally speaking medical evidence points to smokers dying sooner than average annuity providers give higher rates. These rates can be as high as 20% greater than standard annuity rates.
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Article Source :
http://www.articleseen.com/Article_Three Very Important Facts About Pension Annuities_45205.aspx
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Author Resource :
Annuity Rates will find you the best annuities from the entire market. We can also help you find the best Halifax retirement plan.
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Keywords :
retirement, home finance, annuity,
Category :
Finance
:
Finance
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