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MARCH 2014 BUDGET – Makes Annuity Advice More Relevant

Have you considered the alternatives to Annuity purchase?

ABI introduces code of conduct changes for Annuities

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Contact us today for an annuity quote

Have you considered the alternatives to Annuity purchase?

Do you have any health issues?

It doesn’t cost to shop around, contact us to increase your retirement income

Do you take prescribed medication ?

Smokers may qualify for enhanced annuity rates

Up to 20% variation in the rates offered by annuity providers

An estimated 60% of people might qualify for an enhanced annuity

Annuity Advice – Pension Drawdown Options

With the change in the rules on annuities introduced in the March 2014, in that individuals approaching retirement after April 2015, now have no compulsory need to purchase annuities; should not lead to pension drawdown plans being ignored.

Independent advice will allow the individuals to consider the following pension drawdown options:-

  1. Take the tax free cash (up to 25%) and then pay their marginal rate of income tax on the remaining 75% if they withdraw all the cash
  2. Take out a flexible drawdown of the cash
  3. Buy an annuity and ensure regular monthly/quarterly income.

The flexible drawdown plan allows individuals to draw benefits without committing to the purchase of long term product eg annuity. The flexible drawdown plan is effectively a further pension plan from which an income can be drawn while leaving the residual balance invested – importantly under your ownership – not the insurance company!

Such flexible drawdowns can be classified as slightly riskier than an annuity, but that risk is very much determined by the investments made by the client to generate the required level of income.

This is yet another example when it is important to seek the advice from an independent advisor who can help plan the future finances with the individual and provide the appropriate counter balance between annuity purchase/ flexible drawdown/ cash or combinations thereof.

The advice will reflect what the individual wishes to happen upon his/her demise. If the individual dies (whilst having a flexible drawdown plan in situ), the residual capital in the fund remains part of your estate and can be used to generate income for spouse/partner. However please note that any subsequent transfer to children by the surviving spouse will have a 55% tax charge levied thereupon.

By completing the contact form on the lead page of the website will allow the Annuity Advice Company to address your issues personally and in absolute confidence.

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by: Annuity Advice on Monday 28/04/14

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