26 January 2012

Don't Buy an Annuity Yet...

...without considering all the options. There is a very topical choice to be made as we head towards April 2012, as well as the usual choices that are available for taking an income from your pension (and we are talking "money purchase" or "defined contribution" here).
Pension plans containing "protected rights" (which relate to any time you were "contracted out" of the State Second Pension (or SERPS)) currently have some restrictions on how you take an income from that part of your pension. For instance, if you are married you must buy a 50% spouse's pension.

BUT - from April this year those restrictions are being removed. As a result, you may do better to wait and buy an annuity after April. Then you could choose a different level of income for spouse (or none at all if they have their own pension provision).

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