Annuity:

It is always advisable to explore an open market option (OMO) in the first instance, this is exploring the whole of the marketplace for the most bespoke deal available.

The payment of a regular income by a life company to an annuitant either for life or shorter periods in exchange for a lump sum. Annuities are typically used for pensions and the individual receiving the annuity is known as an annuitant.

In the UK they can broadly be classified into two types:- A compulsory purchase annuity, which is bought from the proceeds of a pension fund and is taxable as earned income.

A purchased life annuity, which is bought with an individual's own capital and taxed at a lower rate than a compulsory purchase annuity.

There are three different types of pension annuities, commonly referred to as standard annuities, with-profits annuities and unit-linked annuities.

Standard pension annuities are the most commonly purchased and account for over ninety per cent of the UK market.

The income from a standard pension annuity is guaranteed for the rest of the annuitant's life whereas the income from a with-profits or unit-linked annuity will fluctuate depending on the investment performance of the underlying assets.

It is always sensible to explore the whole market using what is known as the Open Market Option to discover if it is possible to source a higher level of pension income that that offered by your own Company.

Also, it is possible to obtain increased pension income if you or a dependant spouse suffers from certain illnesses or, even if you are a smoker.We will always exoplore this avenue with all clients wishing to vest their pension to ensure the best income possible is achieved.

For more information click here.*