Annuity Purchase Centre

Retirement is a big subject, especially the subject of funding that retirement. In the last fifty plus years things have changed and plans that once worked for retirement have had to be refigured.

The best time to start saving for retirement is when you are young, as the more years you pay into your retirement fund, the more substantial a fund it will be. And, consequently, the better a retirement and bigger annuity supermarket you will be able to enjoy. Most Britons are eligible for the basic State Pension, but are likely to need more for a comfortable retirement.

There are various ways to go about this. A good first step is to speak with a financial advisor who can help you to crunch your numbers and determine how much of your income you are able to stash away, and what method of “stashing” you should use. Bear in mind that a retirement fund is a long term investment; you will not be able to touch those funds until you are at least 55 years old. This means that “once in, long time in,” so you have to be sure you know how much money you can afford to invest into your retirement annuity fund, without hurting yourself in the present.

A good place to check out when you begin contemplating your retirement fund is the pension scheme your employer offers. At this point, it is not required of UK companies with less than 5 employees to offer a retirement scheme, but some do anyways. It is projected that the laws will change to require all employers to offer retirement benefits to their employees. Some employers pay into your retirement plan, others match your contribution, and some do not contribute, but only offer the investment plan for their employees to pay into.

Some, either for being self employed, or for some other reason, look into other forms of saving for retirement. This can be personal investments, or stocks and bonds that are likely to mature over time. Others are counting on property, or insurance policies funding their pension. Each of these options are viable, if done correctly. If you are interested in a more alternative saving plan, speak with an advisor to get the best idea of what the options are.

Remember that your contributions to your pension fund come with tax relief. This can get you a nice break and make it easier to save for a comfortable retirement.

Presently, the age when you can claim your State Pension is 65 years for men and 60-65 for women. Depending on the year you were born in. Retirement annuity age is scheduled to go up to 65 for all women between April 2012-November 2018. It is expected that the State Pension claiming age for both men and women will continue to inch up, based on life expectancy, and other factors.

For those who want to know what is an annuity pension, simply put it is an income you can receive for the rest of your life. It can be bought with the money from your pension fund and is is usually a low-risk opportunity. Those who want to simply enjoy the golden years and have intention to struggle with investments and have sleepless nights because of that mostly choose the guaranteed pension annuity. Ehen applying for this annuity, there are three major options to consider. The first one is when your income stays the same for the rest of your life, which means that you won’t get any increases in the future and you wouldn’t be able to protect your income from inflation. The second choice is when your income rises each year by fixed amount, and it also means that the higher the rate of increase the more your initial income will be reduced. In the third option you income will change each year to get in line with inflation which can be sometimes good and sometimes bad.

There are four major categories of this type of annuity:
• Open market annuity – which means that annuitant can buy a compulsory purchase annuity for any company on the market. This one can apply to with profit and standard annuity, as well. Before choosing any company it’s important to find out what is an annuity pension one company can offer at the best price and then do the rest. That is important because once you buy an annuity, you won’t be able to change it or change the provider.
• Smoker annuities – this can be applied to pension and purchase life annuity. There are many benefits for those who belong to this category, such as increase of income or income of a lump sum in retirement. Those who smoke at least ten cigarettes a day and they have done it for at least ten years, they can get enhanced rates from a life company. The enhanced annuity also includes the place where annuitant lives, not just his lifestyle.
• Diabetes annuity – it is similar to the previous category because it includes people who have problematic health conditions. There are different types of this annuity because of different types of diabetes: one that is controlled by diet, the non-insulin dependent diabetes and the insulin dependent diabetes.
• Impaired life annuity – it can be applied to pension impaired health annuity and purchased life annuity. It is created for people who have significantly reduced life expectancy and they include immediate needs annuity.

It is not easy to understand what is an annuity pension and what benefits one can have from it. What makes this annuity type so attractive is mostly the regular income during the annuitant’s lifetime. Besides that, there are no charges to income or surprise charges since everything will be calculated in the beginning. The income may even get higher though years if someone has a clean bill of health or has some particular health conditions. After all, benefits are more important that disadvantages of this annuity.