-- One year annuity deferral could take 24 years to recover --


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One year annuity deferral could take 24 years to recover
One year annuity deferral could take 24 years to recover

 

Individuals that defer annuity purchase for one year could have to wait 24 years to recover the value lost at current rates, according to Annuity Direct

For example a client could buy an annuity today and receive £6,000 a year but they want to defer to see if rates increase.

By deferring for a year the client is immediately losing £6,000. A year later they are a year older, so if annuity rates had gone up but their pension fund stayed the same value, they might get £6,250 a year.

The cost of getting an extra £250 a year means it will take 24 years to make up the £6,000 a year they deferred.

Credencis say: “It may take a long time to recover the income you have foregone.”

Purchasing at an older age might mean an increase in the income level, simply due to the fact that annuity rates increase as you get older.

However, it might be worth comparing the amount gained by deferring purchase with what could have been received if the purchase had not been deferred.

For bespoke annuity advice on your pensions contact Credencis.

We are situated near to Derby and Nottingham and visit clients nationwide.

Credencis

"Live for today, Invest for tomorrow"

Views expressed by our author, are the personal views of the author alone, and are not intended in anyway to be construed as advice.They should only be used as guidance and are not necessarily suited to the personal circumstances of every individual in the UK.If you are interested in seeking advice further then please contact Credencis direct.