News

When it comes to using your pension pot, buying an annuity is one option guaranteed to provide a regular and guaranteed income. It is, however, important to note that purchasing an annuity is typically an irreversible commitment.

We are finding a lot more people are interested in creating more certainty for their retirement, possibly because of the current cost of living crisis; or maybe due to the historically high annuity rates currently available. At present annuities are offering better value for money than at any time in the last decade, this is possibly the only positive outcome of the current inflationary environment!

An essential part of choosing an annuity is to shop around, this is crucial in securing the best possible deal for your retirement income. You don’t have to accept the annuity offered by your pension provider, ask an independent financial adviser to research your options fully, as the difference between the best and worst annuity rates on the market could be significant for your income in retirement.

The main differences between annuities and pension drawdown products are control and security; annuities require you to make a decision on your income at the outset, pension drawdown products allow flexibility to change your income withdrawals as and when required. The annuity option is secure and will provide a certain income irrespective of how investment markets perform, a drawdown pension can run out of funds if the level of income withdrawals is set at an unsustainable level, market conditions are unfavourable or the investor lives longer than expected.

It is important to stress that making this type of financial decision involves risk and it is recommended that you seek sound financial advice before making a decision; the suitability of any retirement product depends upon the investor’s personal circumstances, their aims and objectives, an annuity is not suited to everyone.

A Financial Adviser can help you to understand which product suits you best, what features to include and whether it would be better to use a combination of products.

Our experts are here and happy to help, please contact our Managing Director and Independent Financial Adviser, Steve Balmer

_{David Allen Financial Services (Dalston) Ltd (Registered in England & Wales, Company Number 06966976) has its registered office at Dalmar House, Barras Lane, Dalston, Carlisle CA5 7NY. The company is authorised and regulated by the Financial Conduct Authority. Firm Reference 506138.}