Can annuities be transferred?

14th February 2012

When it comes to purchasing an annuity it is a decision that is made for life. Once you have purchased an annuity it stays with you throughout your retirement up until the day that you die and upon your death the annuity dies with you. As annuities cannot be transferred you may need to take into account your personal circumstances and if you have a family you may need to consider options which also protect them in the event of an unexpected death.

What does this mean I need to take into consideration?

As an annuity is not just a short term investment scheme, but rather a long term plan which could last you up to and over 30 years, it’s important to take into consideration  your circumstances and how you can get the best return on your investment, some of the circumstances that you need to look at include:

  • Type of annuity – do you need to take out a single life/joint life annuity and which can offer the  best rate for both you and your family
  • Age – at what stage of your life do you want to take out an annuity, generally annuities that are taken out later in life will yield a higher annual return
  • Health – if you are in poor health then generally your annuity will yield a higher annual return, this includes if you lead bad lifestyle habits such as smoking or excessive drinking.

It’s important to remember with annuities that there are many variables and different annuity companies weigh these differently. This serves to highlight the need for you to shop around before you consider purchasing an annuity as it could save you thousands of pounds in the long run.

How can I protect my family?

If you are concerned about the loss of your annuity due to an unexpected death there are a number of alternate options that you could consider. These options include taking out a joint life annuity if you have a partner which will guarantee that they continue to receive an annuity income for the remainder of their lives.

You may also consider an annuity guarantee period of five or ten years which guarantees that the annuity will be paid over that period of time regardless of your status.

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