Pension Annuity - The Hidden Gem!

If you have Retirement Annuity or Personal Pension that was started in the 1970’s or 80’s, it may be hiding a little Gem.

 
Some of the earlier Retirement Annuity or Personal Pension contracts included an annuity guarantee within the policy conditions, which under certain circumstances guaranteed the pension rate payable as a percentage of the fund value.

For example it may guarantee to convert the fund value into a pension payment at retirement on a 11:1 or 9:1 basis. This means that for every £100 of fund accumulated at retirement age you could elect to receive either £11 or £9 pa in pension.

When compared to current annuity rates this may prove to be a very attractive proposition and could indeed be considered a ‘hidden gem’.

Normally when these guarantees are provided they are very specific about selected retirement age and limit the options available.

I would recommend that if you have one of these contracts that you read the original policy document carefully to see if any of these options are mentioned. If you are unsure of the policy conditions or find it difficult to understand you should consult a pension specialist before making any final decisions.

Tune in to my next post to find out more about maximising your retirement income.