Could guaranteed income (annuity) be right for you?
Lifetime and fixed-term annuities - what’s the difference?
Now, let’s take a good look at guaranteed income (annuity)
Take care with tax allowances
If you’re thinking of taking some of your retirement savings while you’re still saving into a defined contribution pension, you could lose tax relief on future retirement savings.
When you’re saving into a pension you benefit from tax relief, as long as:
• your own contributions (to all your pensions) are less than 100% of your salary, and
• total contributions (again, to all your pensions) are within the annual allowance – currently £60,000 a year for most people.
This allowance includes your and your employer’s contributions to your pension pot, and your contributions to any personal or stakeholder pensions you have outside work.
However, if you start taking your retirement benefits and still want to carry on saving for retirement, this allowance could fall to £10,000 a year (known as the money purchase annual allowance). The money purchase annual allowance usually applies if you take cash, other than tax-free cash, start taking flexible income, or buy a fixed-term annuity.
An important scams warning
We can help you maximise your potential
Pension Potential offers expert guidance and lots of support to help you understand more about your retirement options.
We don’t offer financial advice through Pension Potential. But, if you decide you need financial advice, we can refer you to our expert financial planners who offer this service.
Guidance is intended to help you understand your retirement options. It won’t make specific recommendations or tell you what you should do.
- Personal insight gives you a personalised overview of the options available to you, but won’t recommend which option would be best for you.
- Tailored insight enables you to use our annuity finder to search the market and buy an annuity. Any fees will be paid by commission from the annuity provider.
- Expert insight offers the option of talking to an expert who will give you help and guidance, but won’t be able to recommend specific options unless you decide to take, and pay for, financial advice. They can discuss this with you.
Financial advice is a regulated professional service that will take your situation into account and make recommendations for options and products.
You may need financial advice if you’re interested in more complicated retirement options such as flexible income (drawdown), or mixing two or more retirement options.
You’ll need to pay for financial advice. We offer financial advice from highly-qualified chartered financial planners, with competitive charges.
We’ll always tell you in advance if there’s a charge for any guidance or advice you take from us.
Help to make sense of all the options
Ask for a free, no-obligation Pension Potential pack showing your personalised options for taking your pension savings.