Should I buy annuity with AVC following budget?

Annie1960

I a just about to sign up to take my annuity from my AVC, but having seen the budget i'm not sure what the pros and cons are of going ahead or waiting for the new rules to come in.

I have a main pension that meets my needs, which is index linked, so my AVC is just for extra income. The pot is fairly small, £40,000, and I was planning to take 25% tax free. I have quotations for an enhanced annuity for about £1700 per annum, level.

Any comments on the pros and cons of annuity versus other options announced in the budget?

OldBeanz

It appears that as long as you have guaranteed pension of £12k pa (including SP) (formerly £20k) then you will be able to use flexible drawdown. As your pensions are index linked if you are under that figure you can wait until you reach £12k. You can then draw as much as you like but should stay below the 40% tax bracket (unless you like paying tax).
Your decision.

coastline

statement today..

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293743/budget_2014_greater_choice_in_pensions_explained.pdf

kidmugsy

Annie1960 wrote: »

I a just about to sign up to take my annuity from my AVC, but having seen the budget i'm not sure what the pros and cons are of going ahead or waiting for the new rules to come in. ...

The pot is fairly small, £40,000, and I was planning to take 25% tax free. I have quotations for an enhanced annuity for about £1700 per annum, level.

Any comments on the pros and cons of annuity versus other options announced in the budget?

In your shoes I'd wait at least until I understood the new rules, both those for tax year 2015-16 onwards, and the transitional arrangements starting on 27th March 2014, i.e. later this month. You might then feel that your health problems give you an incentive to take out capital as quickly as you efficiently can, rather than taking it by the slow route of an annuity. It might even be wise to wait for the Finance Bill to pass, in case any changes are made. That usually happens in July. Thereafter, who knows? Maybe you'll want to get as much out as you efficiently can before the General Election in May 2015, or the Emergency Budget (I guess) of July '15.

At the very least, you'll want to be clear on the distinction between what your AVC provider will be allowed to do, and what they will be required to do. You'll also want a feeling for their timetable for action.

kidmugsy

You might also want to check whether your AVC provider allows transfers out to a different provider, and what the charges for that are. Then if your present provider won't allow something you want to do, you can swap to a provider that will allow it.

Annie1960

kidmugsy wrote: »

You might also want to check whether your AVC provider allows transfers out to a different provider, and what the charges for that are. Then if your present provider won't allow something you want to do, you can swap to a provider that will allow it.

Good point.
Yes, I've had some quotes for the open market option, so am likely to move it anyway.