Looking for advise on my Pension

dunstonh

Redetype wrote: »

Im I right in saying that a annuity is the entire lump of money that is in the pension now to be reinvested in a better performing fund.

No. That is fund switching.

The purchase of an annuity is a change in product most of the time. You exchange the capital in return for a guaranteed income for the rest of your life (and dependants if you wish and some guarantees on death as well if you wish). It ceases to be invested (unless you use an investment linked annuity).

EdInvestor

Redetype

Am I right in thinking your drawdown fund is worth about 272,000 pounds and you are taking an income (before tax) from it each year of around 20,000 pounds? Sorry your post isn't quite clear.

Are you happy with this arrangment? If so, you can keep on doing this until you are 75. There is no need to buy an annuity.

With an annuity all your fund is taken by the insurance company.They then pay you an income (which will be lower than what you are getting now) for life, guaranteed. So there is no risk your income could go down.On the other hand, your drawdown offers the possiblity of your income going up (as well as down).

There would not seem to be any real reason to switch to an annuity right now at your age.

Redetype

It has been a good few months since I was on here, however I am back to trying to make the best decision !! Is it a good time to change to an Annuity as the stock market being down, I assume it must recover now the political system has changed well hopefully that is, I am still in drawdown on my pension.
regards Redetype

dunstonh

Is it a good time to change to an Annuity as the stock market being down

The stockmarket is down compared to when?

I assume it must recover now the political system has changed

Stockmarkets are up and down all the time. If you are close to taking benefits on guaranteed income levels then you shouldnt be heavy in the stockmarket anyway. Although bonds have slightly fallen back recently as well.

Annuity rates have been falling. One major player dropped theirs across the board on Friday. They are all like sheep when it comes to annuity rates.

Basically, you are asking if anyone has a crystal ball. The answer to that is no.

jamesd

Redetype, considering only the stock market, the time to convert to an annuity would be when it is as high as it gets, not when it's down. For annuities, the amount they pay out is currently depressed by unusually low interest rates but longer term there's a threat of some regulatory changes that might lower returns or keep them the same even if rates change.

If you want to hedge your bets, plan to make low value annuity buys each year for say ten or fifteen years.