We all imagine enjoying a care-free retirement, watching financial pressures turn into a thing of the past as we approach old age. But there are a few things you can do right now to make sure a comfortable retirement income will be awaiting you when you decide to stop working. One of them is investing in a pension annuity, which is a retirement financial product designed to give you peace of mind knowing you’ll have a regular, set amount of money coming in. Keep reading to find out more about pension annuities, whether they’re right for you and how we at Hodge, can help you make the most out of your pension savings.
What are pension annuities?
Pension annuities allow you to turn your savings into a regular retirement income. At Hodge, we offer a Guaranteed Pension Annuity which offers you a regular income for life. If you want to use the money in your pension pot to buy a pension annuity, you can do so.
Who can buy our Guaranteed Pension Annuity?
At Hodge, we offer Guaranteed Pension Annuities for anyone who is a UK resident at the time of making the application (excluding Channel Islands and Isle of Man), aged between 55 and 85, and with pension savings of at least £10,000 (after deducting any tax-free cash).
Hodge only offer a standard rate annuity, so if you’re in ill-health, overweight, or smoking, and looking to secure a higher level of income for your retirement, enhanced or impaired annuities may be more suitable, so make sure you shop around to find the pension annuity that suits your needs.
Benefits of pension annuities
Guaranteed income for life
Receiving a regular income in retirement through a pension annuity will not only give you peace of mind knowing that you’ll receive the funds for the rest of your life, but it can also make planning your spending easier, as you know what amount of money to expect.
You can choose your payment frequency
We understand how different retirement circumstances and financial positions in older age can be. That’s why we’ve designed a Guaranteed Pension Annuity product that gives you plenty of payment options, so you can find the one that’s suitable for your situation. You can choose to receive your income monthly, quarterly, six-monthly or annually, and can choose to be paid at the start or end of each time frame.
Can pay income to surviving dependants
Our Guaranteed Payment Option allows you to choose between five or ten years, and guarantees that we’ll continue to pay your pension annuity in full to your partner or spouse for the remainder of that time if you pass away. We also offer a Dependents Pension, which doesn’t have any time limits attached to it. You can specify that you’d like either 50%, 66% or 100% of your pension annuity to be paid to your spouse or partner – for the rest of their lives – if you pass away before them.
Our Guaranteed Pension Annuity
At Hodge, you can find a Guaranteed Pension Annuity you can trust, designed with simplicity in mind. You’ll know how much you’re getting with a retirement income that doesn’t change, can include provisions to make sure your loved ones are looked after, and will have the flexibility of choosing the payment frequency you’re most comfortable with.
But, buying a pension annuity is an important commitment, and we want to make sure you’re in good hands with us. That’s why we require you to use an independent financial adviser to give you professional advice, so you can choose the best option for you.
You can only buy a pension annuity from us via an independent financial advisor or broker. If you don’t already have one, you can start your search using the www.unbiased.co.uk website. Alternatively, you can use a specialist annuity broker. These brokers may or may not give advice, but their service should assist you with selecting the most appropriate range of annuity options, based on your circumstances.
There are also lots of informative sources you can use to do your own research. To help you understand your options better, the Government’s Pension Wise website offers useful information on guaranteed income, while Money Advice Service offers an annuity comparison service to obtain quotes.
Pension Annuity Overview
Our Guaranteed Pension Annuity could be for you if you:
- are aged between 55 and 85
- have at least £10,000 pensions savings (after tax-free cash deducted).
- want a guaranteed income for life
- would like your spouse or partner to receive an income after you pass away
- are a UK resident (excluding Channel Islands and Isle of Man) at time of application.
Our Guaranteed Pension Annuity isn’t for you if you:
- have less than £10,000 to invest after taking your tax-free cash
- require a guaranteed income from non-pension savings
- want to make regular or one-off contributions
- want to withdraw amounts from your pension pot as and when you choose
- want flexibility to change any of the options initially chosen
Risks:
There are several important risks to consider when taking out a pension annuity:
- Your policy has no cash value at any time. If you die in the early years of your pension annuity, unless you’ve chosen a dependant’s annuity and/or a guaranteed payment option, you’ll get back less than what you paid for it
- The income from your annuity won’t go up – so inflation or any income tax increases in future years will reduce its buying power
- Your health isn’t taken into account when setting your annuity rate. If you have a medical or health problem, you may be more suited to a specialist annuity from another provider
- Your pension funds could change in value before we receive them. If they go up, you may get a higher income, but if they go down, you may get less
- Once you’ve bought your annuity and the cancellation period has ended, you won’t have access to those funds – even if your circumstances change. That means, you won’t be able to:
- Cash it in or get a refund
- Pay it back into your original pension plan or scheme
- Switch to a different annuity provider
- Change or remove any of your chosen annuity options.
Ready to apply for a Guaranteed Pension Annuity?
If you’re ready to apply, we’ve made it easy – your adviser/broker will help you through the process and our Annuity Application Form is simple to fill in. If you change your mind, you’ll have 30 days from the date you signed the application to let us know.
Don’t hesitate to get in touch if you’ve got any questions about our Guaranteed pension annuities. We’re always happy to help.
Looking for more retirement products? Check out our range of later life mortgages – solutions we’ve tailored specifically for older borrowers.
Find a broker with unbiased
We don’t offer Annuities directly to the public. It’s a big decision, and you’ll need to speak to a financial advisor to make sure it’s the right one for you. If you don’t already have an adviser, you can start your search, using unbiased.co.uk.
Find a brokerDocumentation
Find out more about our pension annuity product by downloading the following documents