Choose an annuity with the utmost care because this will determine a large proportion of your income for the rest of your life. It is vital to work out exactly which annuity suits your retirement needs, depending on your own needs and your family.
When you are nearing retirement, your pension provider may send you an annuity quotation offer that is from your pension scheme. When this happens, and if you wish to purchase an annuity, it may be wise to shop around to try and find a more attractive annuity – which is called taking the Open Market Option.
Suppose you find another provider that offers better terms that will deliver a larger retirement income. In that case, you are legally entitled to take the value of your pension savings from your current provider and buy an annuity from the other provider. Shopping around is vital – pensions experts estimate that some retirees can increase their retirement income considerably, in some cases by 50% or more.
However, this will depend on the age and health of the pension scheme holder.
Pension Commencement Lump Sum (PCLS)
Many people choose to take a pension commencement lump sum and use the rest of their pension fund to purchase an annuity, this can be up to 25% of the pension savings. This single payment is tax-free and can be spent, saved or invested as the policyholder sees fit.
Once the lump sum has been taken out of the equation, the remainder of the money is used to purchase your annuity. You can choose the frequency at which the income is paid. Pension annuity payments are made on a monthly, quarterly, half-yearly or annual basis.
A monthly annuity payment is the most common way of receiving pension annuity, as most people prefer this to make budgeting easier, having always been paid on a monthly basis.
You can also request contact details from the Pension Tracing Service by phone or by post.
The Pension Tracing Service
Telephone: 0800 1223 170
From outside the UK: +44 (0) 1782 389134
Monday to Friday, 9:30 am to 5:00 pm
Address
The Pension Tracing Service
The Lantern
High Street
Ilfracombe
EX34 9QB
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The Pension Tracing Service ® is a trading style of the Millennial Wealth Ltd. We are authorised and regulated by the Financial Conduct Authority. FCA number 914746. Unit 11Flag Business Exchange Peterborough Cambridgeshire PE1 5TX. The registered company number is 11557299
This service is not affiliated with the Department of Work and Pensions or any government body. The Pension Tracing Service does not offer financial advice to our clients. However we can allocate you an Authorised and Regulated Pension Specialist.
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