Low Annuity Rates
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The Complete Pension Guide 2017 introduces you to Income Drawdown advisors with the appropriate level of technical pension knowledge.
Income Drawdown is technically more demanding and structurally very different from an annuity. We strongly recommend appointing a suitably qualified specialist pensions advisor to guide you through all of the planning issues that we will begin to touch on here.
Income Drawdown – more information
Income Drawdown gives more flexibility by leaving the retirement planning door wide open for more definitive decisions at a later date.
If you are approaching retirement and thinking about income drawdown, then it is vital that you and your advisor take as many factors as possible into account, including the following:
Income Drawdown is a retirement planning option typically available to a person at normal retirement age (NRA) with a total combined pension fund value of over £100,000.
We are happy to introduce you to a suitable advisor if you complete our form today.
Income Drawdown Reviews and Administration:
The need for advice is very obvious when considering what happens next, after you have decided to initially use Income Drawdown as a financial product that supports your retirement planning.
Firstly, Income Drawdown needs to be reviewed and it is most definitely not a one time planning event that finishes when the transaction is completed. So choosing a supportive and reliable advisor that will be there to guide you through each and every review is vital.
Staying up to date with your chosen funds performance, investment fund values and the potential impact that it may be having on your varying income requirements can be confusing. A quality advisor is there to help you understand the financial impact and address these important technical matters.
Completing paperwork like tax returns and keeping up to date with the Income Drawdown rules and regulations can be stressful. Advisors with strong supportive administrative backup teams can help with every step of the process and are worth their weight in gold.
Your income and therefore your income tax calculations may vary depending on how you use your lump sum and subsequent income options. An advisor with strong links to tax practitioners and accountants will be able to plan and demonstrate the optimal strategy for you.
Take your Income Drawdown enquiry up a level and complete our form today.
Risk & Reward
Income Drawdown allows you to keep your options open for much longer and maintain maximum planning flexibility around income.
Mortality statistics are improving, people are living longer and so more pressure is being placed on their pension funds to provide income for significantly more years in retirement.
Inflation and rises in the cost of living can be problematic after all the cost of heating, lighting and food isn’t likely to start falling anytime soon. Trying to have your investment returns out-pace inflation often causes people to start blue sky thinking and taking on too much risk.
If you are seeking certainty about your income in retirement with minimum fuss then you may find your advisor steering your conversation in the direction of an annuity.
Steer yourself through the more challenging issues with a qualified Income Drawdown specialist, complete our form today.
Unfortunately, annuity rates have undergone a steady decline in the last 10 years. Although the last 24 months has seen a mini-revival, this seems set not to last as falling rates are once more in vogue. These low rates do not represent good value for money.
It is a mistake to believe that current annuity rates are guaranteed to increase in the future because they are low at present. While this is possible, there is no hard evidence to suggest a rise is certain. Life expectancy has increased over the years and will probably continue to rise. A longer life means that annuities have to be paid out over a longer period of time and this causes annuity rates to tumble. Naturally, low rates equals poorer income.
Annuity companies may also be forced to change the way they hold on to reserves of cash. This is likely to have a negative impact on annuity rates. Long term interest rates affect annuity rates. With interest rates close to an all-time low, annuity rates have no chance of rising. It seems probable that annuity rates may in actual fact get even lower. If you believe this to be the case, it would be wise to purchase annuities now rather than wait a few years.