Apt Financial Management


Annuities are provided by insurance companies. The company that you choose promises to pay you a regular income in exchange for your pension fund, no matter how long you live.

Once set up, the basis of annuity is fixed and offers a secure income that will never run out. However, because the terms of your income are fixed it is important to choose your options carefully as once it is set up you cannot change your mind.

You rarely have to stay with your existing pension provider when you retire and often they will not offer you the best annuity income.

The options you choose will affect the level of income you receive from your annuity. For instance, by choosing an income that remains level you will receive a much higher initial income than by choosing an income that increases over time.

A high proportion of people retiring choose to accept the income (annuity) offered by their pension provider.

The difference between the best and worst annuity incomes can be significant.

Paul Toon

Paul ToonIt is also possible to purchase an annuity with money outside of a pension. This may be a lump sum from your savings, proceeds from an investment or money you have received from an inheritance. Annuities bought with your own money are known as Purchased Life Annuities.

If you would like to discuss any aspect of service or require more information or advice on annuities then please do not hesitate to contact Paul.

What is the Open Market Option?

The ‘Open Market Option’ allows a person approaching retirement to shop around to obtain the best possible income for their pension fund.

This is the area we can provide specific advice which can potentially secure £1000’s extra income during your retirement.

Enhanced Annuities

Research has shown that up to 40% of people could obtain enhanced rates when they set up their annuity, yet only a tiny proportion actually apply for them.

Do you qualify?

  • Are you a smoker?
  • Do you take prescribed medication?
  • Have you suffered a particular medical condition?

If so, some annuity providers will pay you a higher income than a conventional insurance company based on the same pension fund value. There are over 1,500 conditions that could result in a better annuity.

How can they pay higher annuity rates?

Statistics show that people have a shorter than average life expectancy if they have suffered certain illnesses.

The specialist providers of enhanced annuities use this to your advantage paying a higher income as they calculate that, on average, your income should be paid out for a shorter period of time.

However if you were to live longer than they expect your income will still be paid for life.

A Pension is a long term investment the fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.

Apt Financial Management, 4 The Willows, Hulland Ward, Ashbourne, Derbyshire DE6 3EW
Phone: 01335 370 515