Thinking Finance UK Limited Annuities
At Thinking Finance we realise that once you get towards retirement deciding how to maximise the monies you have built up in your pension(s) can be confusing. The pension company or life office send you pages and pages of information, which puts the majority of people off.We can make this process very easy for you. It will take a short meeting to discuss where you currently have your funds, and is it possible to move them. Not every pension scheme can be moved and in some cases you may disadvantage yourself by moving them. Do you want to take the tax free cash element? How much income do you need? Is the income for two people or just one?
We would also talk to you about an Open Market Option(OMO), in layman's terms, taking your pot of money to another company who will give you a better income than your existing scheme. We would also talk to you about your health, smoking status any medication that you are on, to see if you are entitled to an enhanced or impaired annuity.
The amount of income an annuity will pay depends on, among other things: The amount in your pension fund after taking any tax-free cash. You must take any tax-free lump sum before your 75th birthday. Whether your fund includes national insurance rebates because you contracted out of the additional State pension - you must buy a 50% spouse's pension with funds arising from national insurance rebates if you are married or have a civil partner. Your health or lifestyle - some annuities pay you a higher-than-normal income if your health or lifestyle threatens to reduce your lifespan. Your age - the older you are the higher the income you get will be. This is because, on average, an older person has fewer years left to live than a younger person. Because people are living longer, annuity rates are adjusted from time to time to reflect this. So if you delay buying your annuity you could be taking a risk. And of course rates may rise and fall for various reasons. Your sex - usually the starting income from the same size of pension fund is higher for a man than for a woman, of the same age. This is because, on average, the life expectancy of a man is less than a woman of the same age. The benefits you choose, for example: whether the annuity is for you, or for you and your spouse or partner , if the annuity is level or escalating - or if it is guaranteed to pay out for a minimum number of years, even if you die during that time
Enhanced Life Or Impaired Annuities and Long Term Care Annuities
These annuities pay a higher than normal income if you have a health problem that threatens to reduce your lifespan. This doesn't mean that you have to be dying to qualify for one of these products. It does mean however if you are currently on medication or have been a smoker or are still a smoker you will be considered for an enhanced annuity. If you are terminal ill, then you maybe eligible for an impaired annuity.
All annuity companies will quote on a series of criteria. Relevant health problems might include cancer, asthma, diabetes, heart attack, high blood pressure, kidney failure, multiple sclerosis or stroke. You might be able to get an enhanced annuity if you are overweight or smoke. This is maybe one of the only occasions that you get rewarded for not eating properly or for the more you smoke and for the longer you have been doing it?
Some companies also offer higher rates to people who have worked in certain occupations or who live in certain areas of the country. Postcode is a factor, which is widely used when determining amounts that an annuity company will offer.
At Thinking Finance we shop around for you and go to the market on your behalf to get you the best deal. All you need to provide is the details of where the lump sum to buy the annuity is coming from. We can use monies from your personal pension or retirement annuity contract or from your savings. We cannot use the money from certain types of occupational pension schemes. We will also need some basic personal and health questions answering.
Long Term Care Annuities
Several annuity companies now provide long term care annuities. These are a fairly new product but work along similar lines to a normal annuity. You provide a lump sum to a company they agree a monthly amount which can be paid direct to the nursing care home. Any payments made are free from any tax liability to the annuitant. Should your health improve the payments are transferable back into your own personal bank account. However you would then have a potential tax liability dependent on your income levels at the time.
Like the criteria for enhanced and impaired annuities, long term care annuities are based on health, medication, smoking status height, weight and postcode.
We appreciate at Thinking Finance, that this product can be a tricky one to talk about. It will be a big decision for you as a family to consider moving a loved one into a home and moving their money around for them also. In a lot of cases to do this, you will have had to go through power of attorney procedures which can be upsetting and complicated. We will assure you of a professional and caring approach to your personal situation and explain everything in a clear and understandable manner.
Should you require any additional information on these products please contact us on admin@thinking-finance.co.uk
