Mr C has been a client for some years. He has some medical issues which are pertinent to how his pension should have ideally been structured. He has a low attitude to risk and in discussing his pension requirements, we saw that his situation wasn’t right for a drawdown scheme. However, Mr C wanted a guaranteed income.
We approached Mr C’s provider to see what kind of annuity was available. Then we looked further to see if we could get something better. We talked to companies who offered enhanced annuities – essentially annuities for people who are ill or have medical issues.
We settled on a provider who offered an annuity that was worth several hundred pounds a month more to Mr C – making a significant difference to his lifestyle.
It was an interesting ‘case’ for us. While annuities aren’t right for everybody, there are circumstances when they are the best option. Our client had been with his pension provider for something like twenty or thirty years, yet that bit of research and ‘shopping around’ we did, if you like, resulted in a significant improvement to Mr C’s financial position in retirement.
This is an example where using an independent financial adviser to research open market options worked well for the client. Mr C ended up receiving a much higher income while he was alive as opposed to potentially losing a big chunk, years down the line.
It is definitely worth researching, ‘shopping around’. Your existing provider may offer an annuity of £10,000 a year whereas a closer look at other providers might result in an offer in the region of £11,000 a year. That’s not only a tidy improvement in the first year or two but if you consider that over fifteen or twenty years it makes a significant.
Take your time. Don’t sign the first thing that pops through your letter box or is thrust under your nose. Look around and talk to an independent financial adviser.
Risk Warning.
The information contained in this article is provided in good faith and is provided for information purposes only.
Whilst every care has been taken in the preparation of the information, no responsibility is accepted for any errors which, despite our precautions, it may contain.
No individual investment advice is given, nor intended to be given, in this article and no liability will be accepted in respect of any action you may take as a result of reading this material.
If you are unsure whether any particular investment or any specific course of action may be suitable for you, you are urged to take independent investment advice.
