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					                                                                                           The
                                                                                           Annuity
                                                                                           Bureau
                                                                                            from Alexander Forbes




                                                                           The final countdown




                If you are close to retiring and would like to prepare for the future, we recommend
                that you plan ahead to avoid losing thousands of pounds of your retirement
                income, by investing in the right product(s) for you.
                There is more to retiring than picking up a gold watch and going home and if you don’t want to run
                out of time to prepare for it please do start planning now.

                                                                                  7
                On average, a 65-year-old male is expected to live for a further 1 years and his female counterpart
                almost 20 years* – this is a very long holiday to fund. Please make sure you explore all opportunities
                and make the most of your money.


                *Source: Office of National Statistics, UK Interim Life Tables 2007-2009



0800 071 8111                                                          Alexander Forbes The Annuity Bureau
     The Annuity Bureau




     Did you know?


     The difference between the best and worst conventional
     annuity provider rates can easily be as much as 35%.
     For example Mrs F was offered £1,71   7.39 with her
     existing pension provider and we were able to increase
     this figure to £2,322.36 by sourcing an annuity on
     the open market, a difference which could amount to
     £1 2,099.40 or more over a typical retirement period.


     • You can take some of your pension savings as a
       pension commencement lump sum which is paid
       tax-free.

     • You don’t have to buy your annuity with your current
       provider. Choosing the right insurance company
       could add more to your income. When you retire we
       can research the market place for you to ensure your
       pension is set up with a leading provider on competitive
       rates.

     • You may qualify for an enhanced annuity rate if you are
       in ill health or have had any previous illness or major
       surgery, which is likely to reduce your life span.
       The illnesses include diabetes, liver impairment,
       hypertension (which cannot be controlled by
       medication), heart conditions and many types of
       cancer, whether or not you are in remission.
       Certain lifestyle conditions, such as smoking, may also
       qualify for an enhancement.

     • You can often obtain a better deal if you combine your
       benefits from different sources. So remember that we
       may be able to help you with other pension funds you
       have.
                                                                  Top personal pension annuities
     • You don’t always have to purchase a pension
       (conventional annuity). Alternative income-generating
       solutions are available, and may be suitable for your      Single Life             Annual Income      Annual Income
       individual circumstances and situation. These include                              Male 65            Female 65
       unsecured pensions, impaired life and investment-linked    RPI                     £ 4,401.00         £ 3,921.99
       annuities.
                                                                  Level                   £ 6,990.12         £ 6,542.39
     If you would like further information about any of these
                                                                  Smoker                  £ 8,392.14         £ 8,060.33
     alternatives, please contact us for a no obligation
     discussion with one of our consultants.                      Impaired                £ 9,072.00         £ 8,575.60


                                                                  Notes: Figures assume an annuity purchase price of £100,000,
                                                                  single life, no guarantee period and are shown as gross annual
                                                                  income, paid yearly in arrears. Smoker rates are based on someone
                                                                  who smokes an average of 20 or more manufactured cigarettes a
                                                                  day. Impaired rates are based on someone who recently suffered
                                                                  cancer and is receiving Chemotherapy. Medical evidence is required
                                                                  for an impaired life annuity. Rates as at January 2010.
                                                                  Source: The Annuity Bureau




0800 071 8111                                                                                          www.annuity-bureau.co.uk
     What to consider when you have at least
     one year to go…
     Start considering how you are going to spend your time and           Action plan to make up shortfalls
     what your objectives will be in retirement
                                                                         •	Consider	maximising	your	pension	contributions.	If	you	would	
     •	Where	will	you	retire	to?	                                          like us to help arrange this and calculate the amount you
     •	How	will	you	spend	your	time?	                                      could pay please call 0800 071 81 1. 1
     •	Will	you	have	medical	cover?	                                     •	 Consider	paying	additional	National	Insurance	Contributions	
     •	Are	there	any	hobbies	you	wish	to	pursue?                            to maximise your state pension. Please note that the number
                                                                            of qualifying years for the basic state pension has been
     •	What	goals	are	you	going	to	have	in	retirement?	
                                                                            reduced	to	30	years	for	individuals	retiring	after	5	April	2010,	
     •	What	will	you	do	when	you	wake	up	each	morning?                      so additional National Insurance Contributions may not be
     •	How	will	you	plan	your	days?                                         required to get a full pension.
     •	Consider	how	your	partner	will	react	to	having	you	around	        •	Decide	on	a	possible	retirement	date	or	defer	taking	your	
       100% of the time and what plans they have.                          pension to build further savings.
     •	Organisations	such	as	Age	UK,	www.ageuk.org.uk can help           •	Working	part	time	in	retirement?	(Make	sure	you	will	be	doing	
       with the above. (See back page for useful contacts.)                something you enjoy.)
                                                                         •	Consider	paying	off	debts.
     Finance – find out what regular income you are likely to have
                                                                         Prepare your pensions for retirement
     •	Request	valuations	for	all	your	pensions	–	(current	values	and	
       estimated future values at your chosen retirement date).          •	Consider	moving	your	pension	fund	investments	into	less	
     •	Make	sure	relevant	insurance	companies	have	your	proper	            volatile investments in the run up to retirement.
       address.                                                          •	Consider	amalgamating	your	pension	funds	into	one	
     •	Remember	to	get	a	valuation	for	your	state	pension.	You	can	        to enable one annuity purchase or unsecured pension
       apply for a forecast online at www.dwp.gov.uk                       remembering to investigate costs of transfer and penalties.
     •	Ensure	you	track	down	any	previous	pensions	from	previous	        •	Check	for	any	guaranteed	annuity	rates	and	Government	
       employers or providers - this alone can take between three          requirements to purchase prescriptive benefits, for example if
       and	six	months.	(Contact	your	Independent	Financial	Adviser	        you	had	contracted	out	of	the	State	Earnings-Related	Pension	
       (IFA)	or	see	www.pensionsservice.gov.uk for assistance.)            Scheme	(SERPS)	or	the	State	Second	Pension	(S2P).		
                                                                         •	Are	your	pension	funds	written	in	trust	in	case	you	pass	away	
     Will it be enough?                                                    before	your	annuity	purchase?
     •	Once	you	receive	them,	check	that	your	pension	and	other	
                                                                         Inheritance, gifts and income tax
       investments are on track and are going to give you what you
       want in retirement – in any event, it is always worthwhile
       reviewing	your	investments	such	as	ISAs	and	endowments.           •	Do	not	gift	it	all	away	-	a	20	year	plus	holiday	is	expensive.	
     •	Calculate	approximate	income	from	all	pensions	and	               •	Discuss	this	area	carefully	with	your	IFA	to	ensure	that	your	
       investments.                                                        objectives are met, whilst at the same time securing your
                                                                           retirement and minimising inheritance tax.
     •	What	will	be	your	main	source	of	income?
                                                                         •	Remember	your	house	is	an	asset	-	consider	inheritance	tax	
     •	Calculate	your	living	costs	to	set	the	budget	you	will	need.
                                                                           implications.
     •	Will	the	mortgage	be	paid	off?
                                                                         •	Make	sure	your	will	is	up	to	date	and	that	it	will	achieve	what	
     •	Review	your	expectations	of	retirement	income	if	necessary.         you want it to.
     •	Draw	up	a	list	with	potential	income	on	one	side	and	ongoing	
       expenses on the other.                                            Pension commencement lump sum (tax-free cash)
     •	Will	you	have	enough	to	live	off?	
                                                                         •	Will	you	need	a	lump	sum	at	retirement?	Whether	it	is	
     •	Remember	to	account	for	any	one-off	expenses,	e.g.	a	               to replace a company car or to pay for the holiday of a
       wedding or a holiday such as an around the world trip.              lifetime, you will need to take account of this when setting
     •	 Consider	rearranging	your	other	assets	to	produce	an	income.       your financial plans.
     •	Do	not	forget	that	you	need	to	build	in	some	protection	to	       •	What	will	your	tax	position	be	in	retirement?	Even	if	you	
       counter the effects of inflation.                                   want to maximise your income from your pension fund, it
                                                                           may be better to take a lump sum and generate income in
                                                                           a more tax efficient manner.
                                                                         •	What	other	capital	do	you	have?		If	you	have	other	
                                                                           investments, you may be able to use your lump sum as
                                                                           part of a tax efficient income stream.
                                                                         •	Do	you	understand	the	implications	of	choosing	to	take	a	
                                                                           tax-free	lump	sum?



0800 071 8111                                                                                            www.annuity-bureau.co.uk
     What to consider when you have
     six months to go…
     •	 Involve	your	partner	and	discuss	their	                        •	 Have	you	made	use	of	all	your	
        requirements.                                                     allowances, such as ISAs, pension
                                                                          contributions etc.
     •	 Are	your	plans	on	target?
                                                                       •	 Check	that	the	risk	profile	of	the	funds	
     •	 What	have	you	not	yet	achieved?	
                                                                          in which you are invested match your
     •	 If	any	have	not	been	completed,	take	                             requirements.
        some time out to get it right. After all you
                                                                       •	 Are	your	investments	on	track?
        only get one shot at this.


     Pensions                                                          •	Who	else	does	your	pension	need	to	provide	for	should	
                                                                         you	pre-decease	them?
     •	Review	your	pension	objectives	with	our	retirement	             •	If	retiring	to	live	overseas	check	all	tax	implications	and	
       consultant.                                                       include headroom for the effects that any currency
     •	Think	about	your	attitude	to	risk	in	retirement.                  exchange	fluctuations	might	have	on	your	UK	pension.
     •	Do	you	want	a	secure	guaranteed	pension	or	do	you	want	
       to take on board investment risk and longevity risk in return   Life Assurance
       for which you may receive a higher or lower income and
       more	flexibility?                                               •	Review	life	assurance	schemes	–	what	needs	to	be	kept	
                                                                         and	what	needs	to	be	discarded	at	retirement?
     •	Determine	the	frequency	of	how	you	want	your	pension	
       income to be paid.                                              •	What	life	cover	if	any	is	being	used	for	estate	planning?
     •	Do	you	want	the	maximum	tax-free	cash	up	front?




0800 071 8111                                                                                        www.annuity-bureau.co.uk
                                                                                                      www.annuity-bureau.co.uk
     What to consider when you have
     three months to go…
     Health	check	

     •	If	your	company	offers	one,	have	a	full	‘MOT’	before	leaving.      Sensible planning
     •	If	you	are	going	to	receive	a	pension	income	directly	from	
       an occupational pension scheme and you think you have                               2
                                                                          It could take 8-1 weeks to set up your annuity. To try
       lower than average life expectancy, you should advise              to ensure that it is ready for your retirement you should
       the scheme as this may give rise to you receiving higher
       benefits.
                                                                          make your choices and complete the forms at this point.
     •	If	you	are	likely	to	have	a	shortened	life	expectancy,	use	
       an annuity specialist as many of the providers who offer
       increased	pensions	in	this	area	only	do	so	through	IFAs.

     Unforeseen future costs                                           Unsecured pension (Income Drawdown)

     •	Are	your	parents	likely	to	require	long-term	care	and	if	so	    Considerations:
       will	you	need	to	help	out?	Care	fee	annuities	if	correctly	     •	Do	you	want	to	be	hands	on	or	hands	off	regarding	your	
       structured are a tax efficient way of managing any ongoing        investments?	
       liability in this area.
                                                                       •	Check	that	your	financial	planner	clearly	understands	your	
                                                                         attitude to risk and income objectives.
     Your annuity or unsecured pension (Income Drawdown)
                                                                       •	Verify	the	financial	strength	of	the	company	invested	with	
                                                                         and the abilities and resources of your financial adviser.
     •	Start	the	implementation	process	with	your	specialist	IFA.
                                                                       •	Ensure	that	a	structure	is	in	place	to	review	your	unsecured	
     •	Shop	around	for	the	best	and	most	appropriate	retirement	
                                                                         pension benefits on, at least, an annual basis.
       vehicle.
     •	Are	you	a	risk	taker	or	risk	averse?	                           Your tax-free cash sum
     •	Should	it	be	an	annuity	or	an	unsecured	pension?
     •	Understand	the	risks	involved	in	the	different	propositions.    If you decide to take your tax-free cash entitlement from your
                                                                       pension scheme, you may well have already identified suitable
     •	Discuss	in	detail	how	you	want	your	pension	payments	to	
                                                                       uses for it – a special one-off purchase, repayments of a loan,
       be structured.
                                                                       paying off your mortgage, or just as an extra cash fund to
     •	Make	sure	the	course	of	action	you	agree	to	is	the	correct	     provide	peace	of	mind.	Alternatively,	you	may	want	to	use	this	
       one for you – in many cases once implemented it can             money to provide you with extra income or capital growth.
       never be changed.
                                                                       A	specialist	IFA	can	help	you	in	a	number	of	ways:
     Annuity                                                           •	Maximising	tax	efficiency
                                                                        i. income tax
      Some key ones are:
                                                                        ii. capital gains tax
     •	What	kind	of	annuity	is	best?	Should	it	be	fully	guaranteed	
       or	investment-linked?                                            iii. inheritance tax

     •	Or	will	a	combination	of	an	investment-linked	and	              •	Analysing	your	attitude	to	risk
       conventional	annuity	and/or	unsecured	pension	be	better?        •	Investing	for	income
     •	Do	you	qualify	for	a	smoker’s	annuity	or	impaired	life	         •	Investing	for	growth
       annuity?	These	will	pay	a	higher	pension.




0800 071 8111                                                                                         www.annuity-bureau.co.uk
           What to consider at retirement

           Be prepared for the unexpected                                           The Pensions Regulator
                                                                                    www.thepensionsregulator.gov.uk
           •	There	could	be	delays	in	setting	up	your	retirement	benefits	          Information on work-based pensions, promoting high standards and
              due to providers administration or unforeseen hiccups.                good practice in running pension schemes.
           •	Have	an	emergency	fund	for	unexpected	expenses.                        Financial Services Authority
           •	Think	about	how	your	needs	will	change	over	the	course	of	             www.fsa.gov.uk
              your retirement.                                                      Useful	for	consultation	papers	and	consumer	guides,	including	the	
           •	Do	you	think	that	you	will	enjoy	taking	it	easy	in	retirement	         information	service	entitled	‘Pensions	Made	Clear’.
              or are you likely to work part-time, either for extra income          Financial Services Compensation Scheme
              or	charity?
                                                                                    www.fscs.org.uk
           •	 Are	you	considering	home	improvements	or	even	moving	                 Information covering their rules, how to claim and compensation
              house?                                                                limits.

                                                                                    Department of Work and Pensions
           For more information please contact
                                                                                    www.dwp.gov.uk
           The Annuity Bureau on 0800 071 8111                                      Provides	a	range	of	guides	relating	to	the	benefit	system	for	all	UK	
                                                                                    residents.
           Calls may be recorded for training and monitoring purposes.              www.thepensionservice.gov.uk/pensioncredit Information about
                                                                                    pension	credits	from	The	Pension	Service	(part	of	The	Department	for	
                                                                                    Work	and	Pensions).	
           Useful links                                                             Government Actuary’s Department
           www.annuity-bureau.co.uk for current annuity                             www.gad.gov.uk
                                                                                    Information	on	Drawdown	and	other	pensions,	plus	a	range	of	other	
           rates	and	Annuity	Supermarket	                                           statistical and technical information.
           www.alexanderforbes.co.uk our	parent	and	UK	                             Financial Ombudsman
           financial services provider for companies and                            www.financial-ombudsman.org.uk
           individuals                                                              Provides consumers with an independent and free service for
                                                                                    resolving disputes with financial firms.



                                                                                    Specialists in a big team

                                                                                    The	Annuity	Bureau	is	a	trading	style	of	Alexander	Forbes	
                                                                                    Financial	Services	Limited,	a	leading	national	IFA	business	
                                                                                    providing a range of personal and corporate services.
                                                                                    Alexander	Forbes	Financial	Services	Limited	is	part	of	the	
                                                                                    Alexander	Forbes	Group,	an	international	independent	
                                                                                    financial	services	organisation.	The	Alexander	Forbes	Group	
                                                                                    delivers services to small, medium and large businesses, as
                                                                                    well	as	individual	clients	across	Africa	and	Europe.




The Annuity Bureau
Leon House, 233 High Street, Croydon, Surrey CR9 9AF
                1
Tel: 0800 071 81 1 Fax: 020 8681 4093 Web: www.annuity-bureau.co.uk

The	Annuity	Bureau	is	a	trading	style	of	Alexander	Forbes	Financial	Services	Limited	
which	is	authorised	and	regulated	by	the	Financial	Services	Authority.		FSA	Reference:	120975
Registered	in	England	and	Wales	at	5th	Floor,	Leon	House,	233	High	Street,	Croydon,	Surrey	CR9	9AF		Registered	Number:	1804276

AFAB	0006/0111																	03213

				
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