It’s your plan and your money, so the decision is up to you
Income in later life is an extremely important financial subject, and you should know exactly how things work when it comes to making your decisions. Many people are unaware that they have as much choice as they do. Most people will purchase an annuity, which is a guaranteed income throughout your lifetime. Of these people, most will simply get their annuity through the company that they’ve saved their pension with. However, this isn’t always the best option, and as it’s your money, you’re entitled to choose whichever provider you like.
It’s important to note first of all, that comparing providers and coming to a decision can be relatively difficult, as there are many aspects to a pension plan. For this reason, it can often be beneficial to use a financial advice service.
The main thing that you’ll come across when comparing different plans, is the headline rate that the provider will give you. While this is indeed an indicator of how good the annuity will be, it is not the sole reason you should choose a provider; there are other things to consider. The rate, in its simplest terms means more money, but this isn’t necessarily the most important factor. One of the reasons is that some annuities may have rates that change over time, or the amount you receive increases gradually.
Inheritance is one of the major things that may weigh on a person’s mind in later life. With annuities, there can be a variety of options to consider. Often, the annuity is simply an agreement to pay an income until death, at which point the agreement ends, and no money is paid out. This could mean that your loved ones receive no money. For this reason, there are sometimes options that guarantee a certain amount upon your passing.
Illness may also play a pivotal role in choosing an annuity. The money you’ve saved is of course yours, and you want to see as much of it as you can. Should you find before you purchase an annuity, you have an illness that will considerably shorten your life expectancy, then you may be able to get an enhanced annuity, which pays more out in order to compensate.
Providers will not often make all of the details of their products completely clear, which does make the process difficult. An advisor may be able to help you look at all of the potential options and find which ones offer the best rates. You can view the best annuity rates from Pensions & Wealth Management Services Limited, who can help you work out what’s best for you.
Until you’ve taken a look at all of your options, you won’t know if your current pension provider is actually giving you a good deal. There’s no reason to not research your options; it could mean saving or making a lot of money in the long run.