Following the introduction of pension freedoms in 2015, annuity products have become less popular with fewer companies offering them and fewer people taking them out.
Even with all the new pension options now available to those of us who are at the point of considering what we want to do with our pension saving, an annuity is still the only product which can provide a guaranteed level of income for life.
Types of annuity
If you decide to take out an annuity with your pension savings, you will be guaranteed an income from it for the rest of your life. Your annuity will be fixed or increasing (meaning it will increase by a set amount or by inflation). An increasing annuity will start at a lower rate than a fixed annuity.
How annuities work
- You can use some or all of your pension pot to buy an annuity. There are two types of annuity on the market: a standard (conventional) annuity and an enhanced annuity.
- Enhanced annuities can vary from company to company, based on a number of reasons including your lifestyle and your health. For example, did you know that if you are a smoker you can get a better annuity rate if you shop around? It's important for you to understand how enhanced annuities work and for you to provide details of any health conditions you might have. There are over 1,500 different qualifying conditions for an enhanced annuity.
- We stopped selling our annuity product in February 2018*. Instead, we have partnered with a specialist annuity company called Retirement Line, to provide our customers with the most suitable option available to them if they want to take out an annuity with their pension savings when they reach their selected benefit date.
Who are Retirement Line?
Retirement Line are the UK's largest annuity intermediary who will shop around to find you the best possible annuity rates on the market. They offer a no cost or obligation guidance and quotation service. Call free on 0800 158 885 or visit www.retirementline.co.uk.
If you would like regulated financial advice, you can speak to your Wesleyan Financial Services Consultant direct or we can set up an appointment for you by calling 0808 163 5855.
* If you have an existing Wesleyan Personal Pension which offers guaranteed annuity rates or a contractual option for an annuity, Wesleyan still offers these to you. We send you a Retirement Options pack 6 months before you reach your selected benefit date. This will tell you if you have a guaranteed annuity rate or contractual option included in your plan.