It’s not just setting money aside for a pension that you need to do though. You’ll also need to find the best way of drawing an income from that money during your retirement. The simplest way to do that is to set up a pension annuity.
You can set up an annuity when you’re aged 55-75, and it’s basically an exchange of your pension savings in return for a regular, guaranteed income. Life insurance companies sell annuities and the rates change all the time, so the amount of income you receive will be determined when you set the annuity up.
You can find out more by reading the annuities guide at agepartnership.co.uk. Age Partnership is an independent company that searches the annuities market for the best available annuity rates at the time you wish to buy. It takes the headache out of ringing round to different providers yourself.
When you’ve committed to a particular annuity, you can’t change your mind, so it’s important to get the choice right.
With each provider there are different options to consider. You can choose to receive your annuity income monthly, six monthly or annually. Most people take their annuity income in monthly instalments, but it’s down to individual choice. You may also decide to have the same amount of income every month, or to fix the income to rise by a fixed percentage rate each year, so that it grows in line with rises in inflation. It may be that you want to have a joint annuity which includes an income for your partner or spouse after your death.
As you can see there are different decisions to be made before you decide on an annuity. Click here for pension annuities at agepartnership.co.uk to find out further information on how they work.
Guest post by Lorena Benchis: Business expert, freelancer and blogging enthusiast, interested in all to do with Business Startups, Business Security, IT and Finance. I aim to give you all the necessary tips and advice so that you are successful in all your business ventures.