Can I choose how to take my annuity income? Does it have to be level?
In general when you purchase an annuity you will receive your income at a fixed rate, dependant on your annuity provider. This rate will be fixed once you purchase your annuity and will be dependent on your life expectancy, health and where you currently live. Although in many circumstances you will not have a say over how much annuity income you receive, there are options available to you where you can select to receive more or less income depending on your circumstances.
One option that you may choose is to take a tax free lump sum before you begin your annuity plan. This is generally any amount up to 25% and can be taken completely tax free. Many people use this to invest into property or other investments which help to give them control over a level of their finances.
Why should I shop around for an annuity?
If you are looking to have more control over your annuity income then you will need to shop around and look for an option that is available to you. There are various annuities including the inflation-linked annuity which allow you to plan for the future. Although you may start off with a significantly lower income than a normal annuity, you will be able to keep up with inflation as it increases over the years, ensuring that you are able to maintain a good standard of living.
How does the Open Market Option benefit me?
With the introduction of the Open Market Option there are far more annuity options available than ever before. Designed to promote a healthy competition and drive costs down for the consumer, the Open Market Option gives you the choice of purchasing an annuity from anywhere and means that you don’t have to keep with your original pension provider. This ensures that you are able to have an element of control over how much annuity income you will receive.