People who work for themselves not only have to think about
the day to day running of their business, and the next five year strategy, but
on a personal front, they need to take care of their future income during
retirement.
Most people who work for themselves will be putting money
aside into a pension fund – whether it’s a personal pension plan run by a
pension provider or whether it’s a self-invested personal pension that they
decide on the investments contained within it themselves.
But once you get nearer to the age of retirement, you need to
take some decisions about how to make that pot of money work to provide you with
a regular income during your retirement through to the end of your life.
For many people, the most usual option is to buy an annuity.
This is where you exchange the majority of your pension savings for a
guaranteed income paid to you by the annuity provider for the rest of your
life. Annuities can be purchased between the age of 55 and 75. At 55, whether
you have stopped working or not, you can withdraw up to 25% of the value of
your pension fund as a tax free cash lump sum.
For the rest, there are a variety of options in annuities.
You can find out what kind of income you can expect to achieve from your
pension by using the annuitycalculator at Age Partnership. Annuity rates change all the time, and
different providers offer different rates. Your own pension plan provider will
offer you their annuity, but it may not represent the best deal available. At AgePartnership, the company will search the annuity market on your
behalf and present the best deals for your particular circumstances. It’s best
to get this kind of independent financial advice before deciding which annuity
to buy, as once you have set it up, you won’t be able to change it.
