Get The Best Purchased Life Annuity Rates
What Is A Purchased Life Annuity?
A purchased life annuity is an annuity that is bought using a lump sum of your own money, not your pension fund, and what it will do is pay you an income for as long as you live. The income it pays to you is a mixture of your capital that you invested into it, plus some additional interest. For this reason, it is crucially important to ensure you get the best purchased life annuity rates as it means that you will receive a higher income for the rest of your life.
There is often a bit of confusion surrounding life annuities and standard pension annuities. Standard annuities have to be bought from a pension whereas actual life annuities have to be bought using your own money. The confusion is both will pay the income for the rest of your life so you will often hear pension annuities being referred to as life annuities and vice versa.
It is important to mention here that you have the ability to compare the open market when choosing any of these annuities so when getting a pension annuity (also called a compulsory purchase annuity), you don't have to accept the offer from your pension provider.
Call Us On 08000 936399 Or Use The Quick Quote Form On The Right To Source The Best Purchased Life Annuity Rates
Who Is This Annuity Best For?
This annuity is often beneficial for people who have a lump sum of money to invest. Perhaps you sold your house or cashed in your share portfolio or maybe you received an inheritance. Either way, if you have a lump sum of money then some common uses for the purchased life annuity are:
- Increase your current retirement income (you can invest the tax free cash from your pension into a purchased life annuity)
- Care home fees.
- If you are in your 50s for example and have a lump sum to invest then you might want to increase your income before taking your pension.
- Provide an income for children/grandchildren for a variety of purposes, a common one being education fees.
Apart From The Above Uses - What Are The Benefits To A Purchased Life Annuity?
The main benefit is the taxation of the purchased life annuity as it will provide a higher income after tax compared to standard pension annuities. This means that if you use the tax free lump sum from your pension to invest in a purchased life annuity, the resulting return will work out to be extremely attractive.
Some standard features can also be added to the purchased life annuity such as a guarantee period where should the worst happen to you, then the income will continue to be paid to your spouse or dependants for the remainder of the guarantee period. You can also have the life annuity on an escalating basis to try to counteract the effects of inflation. Joint and single versions are available too.
One other, rather unique, feature to purchased life annuities is the option to have capital protection. This means that in the event of early death, the initial capital invested minus the gross income already received will be payable as a lump sum to the beneficiaries.
What Next?
Get some professional advice. When the annuity purchase has been made, there is no going back and it cannot be changed so you need to get it right first time as well as getting the best purchased life annuity rates. An adviser knows the market and the providers and will assess, not only your financial situation but also your future plans so they can advise you on the right annuity for your needs as well as helping you to invest correctly to maximize your returns.
The adviser will also source the best deal from the open market and handle all the complex paperwork for you.
Call Us On 08000 936399 Or Use The Quick Quote Form On The Right To Source The Best Purchased Life Annuity Rates
