Alternatives to Conventional Annuities
A lifetime annuity is the conventional annuity option – but there are several other annuity options to choose from which you should take the time to consider carefully.
The main reason people consider alternatives to conventional annuities is the desire for one or more of the following features:
Continued investment: You might prefer your pension fund to remain invested so that you may have the possibility of a higher initial pension or rising income over the longer term. Remember, you will continue to be exposed to investment risk, as the value of your pension may go down as well as up.
Conventional annuity purchase deferral: If you have an expectation that conventional annuity rates will rise in the future, you may wish to avoid locking in to a rate now; and/or you expect your health to deteriorate and you could qualify for enhanced terms. However, annuity rates may fall.
DID YOU KNOW? Some of the alternatives are far more complex than a conventional lifetime annuity and therefore require full advice. For these reasons they can also be more costly to run.
Should you wish to explore any of the alternatives to conventional lifetime annuities we will be pleased to refer you to our affiliated independent financial advisers.