Annuity

Drew01842

Having taken out a pension many years ago, i forgot it was due to mature at age 55, that has now happened and although it is a small fund, i have two questions.

A. Do i have to buy an annuity or can i take the cash lump sum and put the rest into an isa or some other savings scheme.

B. Because the fund is only 35K i have been offered a yearly pension of £1358 paid quarterly in advance, sound okay, however all is lost if i die before i am 81. Is there better things on the market ?

Regards

Drew

atush

It usually does NOT mature at 55.

Usually will be 60-65 or even longer depending on the type. Personal pensions can be commenced at 55, but DONT have to be. If you do, they might lose value depending ont he specifics.

So you can take 25% as a tax free lump sum, or you can wait til the stated pension age and perhaps get more.

With the 75% you have left, you have a few options, depending on your provider. If you want an annuity you dont' have to take that offer, you can use THE OPEN MARKET OPTION and find out who will pay you the most. If you have any health conditions (such as high BP, heart disease, diabetes etc) that might mean you could die earlier so you can get more money (called an enhanced annuity as you are not expected to live as long as others).

You can only take all your pension IF:

All your pensions are under 18K total and you are 60 or greater.

Or if you have a terminal illness and are expected to die soon.

dunstonh

Having taken out a pension many years ago, i forgot it was due to mature at age 55, that has now happened and although it is a small fund, i have two questions.

Pensions dont mature at 55. They actually are forced to "mature" at 75. However, they are available to commence benefits from age 55. Although most do not. The averages is something around 63.

A. Do i have to buy an annuity or can i take the cash lump sum and put the rest into an isa or some other savings scheme.

You dont have to buy an annuity. But you cant have 100% as a lump sum. Although there seems little point commencing the pension at 55 if all you are going to do is put it in a savings account.

B. Because the fund is only 35K i have been offered a yearly pension of £1358 paid quarterly in advance, sound okay, however all is lost if i die before i am 81. Is there better things on the market ?

Taking the pension income in your 50s is expensive. It gets better as you get to the more common ages in your 60s.

kidmugsy

Drew01842 wrote: »

however all is lost if i die before i am 81.

Not if you are married and opt for a widow's pension to continue after your death.