Receiving Annuity Payments

Receiving Annuity Payments

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  Welcome to The Complete Pension Guide 2017!

For – setting up a new pension, reviewing your pension, approaching retirement, looking into auto enrolment, and buying your annuity or entering income drawdown

Annuities: Immediate Vesting Personal Pension Plan (IVPPP) – Compulsory Purchase Annuity (CPA) – Purchased Life Annuity (PLA)

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Receiving Annuity Payments

Receiving Annuity PaymentsWhen Does Payment Commence?
The official starting date of an annuity depends on you but cannot happen until:

 Your provider receives your filled in application form
 They also receive a quotation signed by you which clearly outlines the way you wish to receive your annuity payments
 A cheque you have sent to cover the annuity price is received and cleared by the provider. This cheque does not necessarily have to come from you, a previous provider from whom you are transferring money can also write it

Certain providers allow their customers to choose the starting date once the above documentation has been received. Generally, this date should not be more than one year after the provider is officially satisfied with all the paperwork.

What people do not realise is that the start date of the annuity is not necessarily the same day you receive your first payment. Many consumers elect to have their income paid either in arrears or advance. An example of this would be a person whose annuity starting date is 1 January 2011 and they have decided to have it paid 12 months in advance. They would receive their first payment on the annuity start date. However, if they set it up so that it is in arrears, they would not receive the first payment until 1 January 2017.

How You Receive Your Payments
You can choose whether you want your annuity income to be paid into your building society or bank account. There is no set payment period with choices ranging from monthly, quarterly, biannually or annually. Most providers will not pay you a gross income of less than £20 per instalment.