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Pension Annuity Service from Partnership for Virgin Money

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Annuities explained

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Buying an annuity is the most common way to convert a pension fund into an income.

However many people don’t realise that you don’t have to accept an annuity if it’s offered by your pension fund provider. You’re entitled to shop around to find the best deal for you. And not all annuities are the same. You can, for example, get a higher income depending on your age and health, and even where you live. Some annuities pay a fixed income, others increase with inflation. Some will pay your spouse or partner if you die first. And, most importantly, different annuity providers may offer to pay you different amounts.

Once you've bought an annuity you cannot change it, (subject to a 30 day cooling off period),so it’s important to understand all your options before making that decision. This section explains the different options available so you can understand them in detail before making a decision.

Any information regarding tax is based on our current understanding of taxation regulations. The rules governing taxation are subject to change and will depend on individual circumstances.

Budget 2014

In March 2014 it was announced in the Budget that the rules governing how you can access your pension funds will be changed from April 2015.  These new rules will allow funds to be withdrawn at any point after the age off 55 with 25% being tax free and the remainder being taxed at marginal income tax rates.  This new option should be considered before you make a decision on how you wish to generate your retirement income, if you wish to consider this new option you should seek advice.

 

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