Joseph, Gloucester

Joseph from Gloucester had a gross pension fund of £99,500. After taking is 25% tax free cash, he was left with £74,665 to purchase his lifetime annuity. Having submitted his details to Insurance Surgery he was passed onto a Retirement Consultant at Retirement Solutions (UK) Ltd.

Joseph suffers from Asthma and is a smoker. The standard annuity quote at that time was offering John an income of £3,706pa with no enhancement for his health and lifestyle conditions.

Having spoken to a specialist who went through a detailed questionnaire regarding health and lifestyle, Joseph secured a guaranteed income of £4,401pa. This annuity also guaranteed 50% of the income for John’s spouse for the rest of her life should John have passed away.

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Andy, Glasgow

Andy from Glasgow contacted Retirement Solutions (UK) Ltd after receiving a quotation directly from his existing pension company, as he was looking for an annuity quotation on the open market. After discussing his situation and set of requirements, we were able to explain his options in a clear and easy to understand way.

Due to Andy’s previous history of cancer, even though he was now fully clear of the condition, we were able to offer a substantial increase against the offer he had received from his pension company. As his existing pension providers did not offer enhanced (impaired) annuities, their offer was 38% lower than we were able to secure for him by using the open market.

The important thing to remember is that you do not need to be in ‘poor health’ to qualify for an enhanced annuity. You could benefit from an enhanced annuity simply because of the postcode area in which you live.

Industry sources suggest that nearly 60% of retirees could qualify for an enhanced annuity.

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5 Common Mistakes When Planning for Retirement and how to Avoid them

The Open Market Option was one the most important breakthroughs for consumers looking to get the best deal for their retirement as they approached the end of their professional working life.

Introduced in 1975, the Open Market Option empowers individuals to shop around rather than simply taking the default rate of their pension provider. Below are 5 common mistakes consumers must steer clear of to make the most of this great opportunity to find the long-term personal saving plan that’s right for you.

1. Changing your goals

Like many projects and activities, momentum can be everything with saving plans. If you’re already saving, keep going – it’s an infectious and rewarding habit to get into.

Make saving for retirement a priority early and stick to the commitment. The sooner you start saving and building up your reserve of funds, the more time your money has to grow. Come up with a plan with clear, achievable goals and set to it!

2. Not knowing your retirement needs

Retirements continues to grow in length, with many individuals now enjoying over 20 years free from the working world after the end of their professional careers. This makes retiring one of the most expensive, defining moments of your life.

Experts believe retirees should require between 70-90% of their pre-retirement earnings to maintain a certain standard of quality of life depending on their income (high to low, respectively). Planning ahead, being honest and keeping things achievable and realistic in your goals and expectations is key to avoiding disappointment and disaster. Research and decide upon what you will be want and need in your retirement and plan accordingly.

3. Dipping into your savings early

Withdrawing money early from savings plans such as annuities can lead to value being lost through taxes and penalties.

Remember: when setting up a long-term savings scheme you are planning for your future retirement. Such personal saving strategies should not be treated as an easy-access account for funding extraordinary purchases or boosting your lifestyle in the short-term. Don’t waste your money on early withdrawals. Stay the course and reap the benefits in your later years.

4. Settling for a raw deal

The Open Market Option gives you the power to shop around and find the best deal before entering retirement. Settling for an inferior or insufficient deal when it comes to your future is no longer an option.

Not taking up the opportunity to see what’s out there is tantamount to dismissing a fantastic amount of extra value that may be on offer from a competitive alternative.

5. Failing to ask questions

If something doesn’t look or feel right about a package, or you feel that you need more information, always ask the relevant questions to find the answers you seek.

When it comes to securing your future, there are no bad questions. By educating yourself and getting informed on personal savings, annuities and financial planning, organising your retirement becomes far more manageable and understandable. When in doubt, just ask!

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British workers now expect to work until they are 64

According to a recent survey, workers in the UK are now expecting they will need to continue working for a few more years than they would like.

A decade ago, people in the UK planned to be able to enjoy a relatively early retirement at 59 years old.  However, a survey compiled by the insurance company, NFU Mutual, highlights that, ten years on, people expect to be able to quit working when they reach 64.  The majority of who, expect to have to work an extra five years because they won’t have enough saved for retirement.

More worrying still is the fact that for people who are supposed to finish work within the next ten years, 6 out of ten are not financially prepared for retirement.   retirement

NFU Mutual’s retirement and pensions specialist, Steve Meredith, said the survey proved that many workers find that once they reach the age they initially wanted to retire at, they find they do not have the finances to do so.

He stressed that more workers need to ensure that they increase their retirement savings and to sit down and financially plan for their futures.  He warned: ‘While some people choose to work longer, there’s a growing number of “retirement rejectors” who don’t ever expect to finish working because they simply can’t afford to.’

The concern that millions of people in the UK will not be able to retire in financial comfort is one of the reasons the Government launched the auto-enrolment workplace pension scheme.

However, this doesn’t appear to have improved the general thinking of retirement incomes.  10% of people questioned for the NFU Mutual survey said they didn’t expect to ever retire, and 65% of parents think that their offspring will find they are unable to afford retirement.

One in six people due to retire soon are expecting to have to source new employment or plan to start their own business.

Opinions on retirement income differ greatly around the country; for instance those in the Midlands are quite happy with their retirement prospects, expecting to have a yearly income average of £22,000 to live off.  Whereas people living in Wales and the South West only think their savings will give them a retirement income of approximately £10,760.

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The open market is a valuable option to find the best annuities

Retirees realise that they need a regular income for longer as they and the rest of the population are living longer than ever before. Older people need to ring around and get annuity quotes from open market insurers. You only need to pay for the cost of a local phone call which makes it an ideal way to find the perfect company for your family. If you elect to use the open market option you will see that there are a range of insurers offering high annuity rates as part of their service. Features vary depending what companies are prepared to offer their customers. Below is a list of features for people to consider;

• Whether customers are treated as unique individuals with their own financial goals
• Provides options for singles and couples
• Varied guaranteed annuities such as 5 or 10 year periods and
• Money back satisfaction guarantee

People will not be out of pocket as companies will give them back their money if they are dissatisfied with the service. This prevents unnecessary loss of income for the elderly as they cope with the pressure of living. Insurers often provide extra incentives for couples with joint annuity protection. Both partners are usually covered until they die. The open market lets companies promote their services o the public. It also encourages insurers to design their own rules and regulations with the law. Most companies use their professional discretion when deciding what they will offer their clients.

Annuity rates are determined by market forces such as;
• The retail price index
• Inflation and
• Economic down turns

The open market will help to minimise your loss when the national economy is slow. The best rates do not always provide you with the income that you want. Companies can offer lower rates yet gradually increase over time. This kind of rate provides you with long term stability which will give you a regular income. You can interview insurers and ask for a written quote to help you decide which one is for you. Specialists are the best people in their profession to speak to as;

• They can suggest a few companies for you to try based on your specifications
• You can confidently know that you will receive sound advice concerning your annuities options and
• They can tell you if a company has enhanced or impaired rates for singles and couples

Retirees are aware that they need a regular income if they are going to enjoy a fantastic quality of life until they die. People can ring around or interview insurers to get the best annuity rate they can for their family. Specialists will provide you with the confidence that you need to select the perfect long term option or you will get your money back. Written quotes let you see the sort of income you will receive in your life time. In conclusion market forces such as inflation control the annuity rate over a 5 or 10 year period.

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How To Get Reliable Enhanced Annuities For Retirees

Retired people usually begin living off their savings as well as the pension scheme so as to take care of their expenditures. However, some people barely get enough from their pensions therefore, making it hard for them to sustain their previous lifestyles. One should not loose hope for they can consider annuities in order to compliment their pension scheme.People usually start living off their savings and pensions immediately they retire, this is to cover their expenditures. Although, for some people, their pension is so little that they have to change their lifestyles so as the money would be enough for their expenses. However, people should be encouraged for Enhanced Annuities is a product that could compliments ones pension and ensure they live comfortably.

This product is no different from the other covers available. In essence what they do is give people a monthly payment after one has paid a huge amount of money. Other than this, there are other things that are considered in order for any person to receive this monthly pay. These things range from, ones age, their pension and where they have chosen to get it from.

The improved annuity scheme is the best thing that could happen to any retired person. They give the monthly pay on the basis of the ‘health. As a result, people who have been struggling with a disease for a long time will get higher rates than if they had considered their pension alone.

This scheme is considered as ideal particularly for anybody with health different health problems. The rates offered by these service providers are determined by several things. Ones life expectancy is the main one. Therefore, anybody estimated to live for long risks being given annuity and if they are given the rates are much lower. This is different from a person with low life expectancy, as they will get higher rates monthly.

Terms and the rates of this annuity scheme will majorly rely on some characteristics. To begin with, they consider whether one is smoking presently, or the number of times an individual takes their medication. In addition, ones weight, their medical history as well as where they reside matter greatly to any annuity plan. The town one lives in is important since it is believed that in some cities the life expectancy for the inhabitants is short as compared to the rest.

There is another type of annuity plan known as impaired annuity. It is concerned with people who have had diagnosis of a particular disease or those people with medical conditions like cancer, or those who have suffered a heart attack before.

Engage in writing a list of annuity firms to choose from as this will assist one to come up with an ideal annuity plan to suit their plans as well as their resources. This exercise is meant to give one the direction on which one to pick as per their terms and what one has qualified to get from them. People need to understand fully the terms and conditions of the annuity scheme they have chosen in order to avoid misinterpretations. Such misinterpretations could lead mismanaging ones pension.

Whenever people find it hard to settle on any of the annuity providers, they should not give up as enhanced annuities will work just fine for them. However, before choosing the ideal annuity plan for one, people need to consider acquiring the services of a financial consultant. They are able to give one the professional help as well as assist one to plan their pension to fit with the expenses they will make years after retiring.

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Annuity Calculator Helps People Choose The Best Options For Their Retirement

Lots of people save part of their income through occupational and personal pension schemes. Most schemes of this nature are money purchase schemes, which means that on retirement the money invested in the fund will be converted to cash, which is used to buy an annuity. At this point there are many different options which the person may consider, including level and escalating incomes, and joint life or single life policies. This article reviews some options that are available. People can use an annuity calculator to estimate the effect of the different options on the amount of income which they will receive in retirement.

Although some people are members of defined benefit schemes, of which final salary schemes are the best known example, most other schemes come into the category of money purchase schemes. An employed person, and also their employer in the case of an occupational scheme, make contributions into the pension fund, which is invested so as to build up as large a pension pot as possible by the person’s retirement date.

When a person retires the pension fund will be cashed in, and is often used to buy an annuity. These are sold by life assurance companies, who undertake to provide a lifetime income, regardless of how many years the pensioner lives for after their retirement date. This system has the benefit of protecting people from the dangers of exhausting the funds in their pension pot.

The following types of pension are normally cashed in to buy an annuity: stakeholder and personal pensions, Additional Voluntary Contributions (AVC), Freestanding AVCs, and retirement annuity contracts. Members of occupational money purchase schemes may sometimes buy the annuity themselves, but in some cases it will be bought for them by the fund managers.

There are numerous different kinds of lifetime annuity, which allow retired people to choose something suitable to their personal circumstances. One of the most basic choices to be made is between a single and a joint life policy. Single life policies do not provide an income for a partner if the pensioner predeceases that person. These are therefore more suitable for single people, or if the partner has their own pension.

There is also a choice between a level and an escalating policy. Escalating policies can be either linked to the RPI, or can increase at some fixed rate, for example 3%.

A third option which may be considered involves a guaranteed payment period. Annuities aim to provide a guaranteed lifetime income, and are therefore poor value if the pensioner were to die at an early age. With a guaranteed period of payment, which is typically five or 10 years, the income would continue to be paid, either to the person’s spouse or partner, or into their estate.

The amount of retirement income depends both on the value of the pension fund, and on the options chosen when purchasing the annuity. Those who wish to estimate the effect of the many different options on the amount of retirement income which they would receive, can use a simple online annuity calculator tool.

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What You Should Understand About Enhanced Annuities

Enhanced annuities are compensated to those retirees which have a lower than average life span. It doesn’t mean you have to be critically ill to be eligible. The annuity supplier that offers the plan expects you to definitely live for a reduced period of time.

Many retired people do not understand how annuities work; not to mention how enhanced annuities work. This really is borne out by the numerous statistics that are documented.The major problem is that most individuals only retire once. And once they do, all of a sudden they’re confronted with the daunting job of converting their pension savings into a sustainable income that will need to final the rest of their existence.

Shortly before retirement, the majority of future retired people will receive a package from the pension organization they saved that describes what you need to accomplish to convert the pension right into sustainable income. This literature will mention improved annuities, but the jargon and the sheer complexity of exactly how annuities work will confuse many individuals reading the information.Which means that they will not understand that they might qualify for special annuity rates that could be as much as sixty percent.

Recently one of the key enhanced annuity companies issued a press release leaving comments that there are over Five thousand medical conditions that could be eligible for a these plans and that in their own opinion the majority of the ones that purchase an annuity are entitled to the higher annuity rates they give.These are incredible statistics and certainly should not be ignored through future retirees.

It doesn’t matter if you have a pension worth a Thousand pounds or One hundred thousand pounds if you qualify for enhanced prices you should apply for all of them.The application process requires completing a health-care information form as well as submitting this to all of the providers that offer these plans. An easy way to do this is to seek the help of a completely independent financial adviser.The actual adviser will do the actual work on your behalf and ensure the funds changes hands smoothly.

A completely independent financial adviser can help you determine whether you qualify for enhanced annuities and take action on your behalf when dealing with the companies. These plans are compensated to those retirees which have a shorter compared to average life span.It doesn’t mean you have to be critically ill to be eligible, merely that the annuity provider that offers the plan expects you to definitely live for a smaller period of time.

Many retired people do not understand how annuities work; not to mention how these special plans work.It is important to become knowledgeable in these plans. Or when approaching retirement, one should seek professional help.

There are a number of options to consider when it comes to enhanced annuities. It can become very complex, so it is advised to get financial counsel. It is important to be informed when using this type of plan.

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Find The Best Annuities Online With Comparison Websites

There are various ways in which people can save for their retirement. These include occupational schemes, and private or individual pension schemes. Most countries allow pension savings to enjoy certain tax advantages. As there are limits on how much can be saved every year in government approved schemes, higher earners may also save using various other forms of investment. In general the money saved up in a pension pot is converted to cash at the time of retirement, and is used to fund an income during retirement. Buying an annuity is one of the most common ways of funding retirement income. Annuities offer a guaranteed lifetime income, which may be inflation proofed, and which can provide other benefits such as a spouse’s pension.

There are various different schemes allowing people to make a pension savings. In most countries there are government approved schemes, which normally offer certain tax advantages. Often money paid into the scheme is taken from gross income. Individual Retirement Accounts in the United States are an example of a scheme approved by the IRS in that country.

In the United Kingdom similar schemes such as Personal Pension Plans, and stakeholder pensions are available. Stakeholder pensions are simplified schemes, intended for low and medium earners, and subject to a low level of annual charges. In most countries there are limits on how much can be saved for a pension per year, and over a person’s lifetime. Some people may therefore use other kinds of pension saving, such as direct investment in the stock market or in property, or in lower risk investments such as government bonds and deposit accounts.

Pension funds do not normally offer an absolute guarantee of the amount of retirement income, but investments are made in various financial markets with the intention of building up the fund value until the time of the person’s retirement. The amount of money in the fund at that time (the pension pot) depends both on how much was saved, and on how well the investments performed. Normally the pension fund manager will transfer the fund to lower risk investments such as deposit accounts and government bonds as the retirement date approaches. This protects the value already built up in the fund. This type of pension fund is often called a money purchase fund.

On retirement the pension pot is used to fund the retirement income. This is quite often done by purchasing an annuity. Annuities offer a guaranteed lifetime income, which can be inflation proofed, and which can provide other benefits such as a spouse’s pension.

Normally an annuity can be purchased from the age of 55. If an annuity purchase is delayed for a long time after retirement the may be financial risks due to mortality drag. Independent financial advice is recommended.

Often the pension fund manager will offer an annuity rate to the fund owner when they reach retirement age. Accepting this offer is not compulsory, and the open market option is available allowing an annuity to be bought from any life assurance company. There are several annuity comparison websites which make it easy to compare rates from various providers.

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Enhanced Annuity The Hidden Majority

• Evidence shows that the majority of retirees might have a condition that may qualify for an enhanced annuity
• Knowledge of this is key to ensuring the highest level of entitled income

For many years it has been assumed that the percentage of people that might qualify for an Enhanced Annuity, giving them an increase in their retirement income, was around 40%.

However research undertaken by Just Retirement on lifestyle changes and medical issues shows that an estimated 60% of people retiring could have a condition that might qualify for an enhanced annuity and potentially obtain a much needed boost to their income in retirement.
Recent advances in the accuracy of medical underwriting have enabled a ‘widening’ of the conditions that might qualify for an enhancement. Just Retirement’s research shows that more people than ever could benefit from an enhancement to their income in retirement. Also combinations of medical conditions and lifestyle issues are now taken into account in far greater detail.

If you have any severe medical conditions, you may already be aware that you could be entitled to an increase in income during your retirement years, but what of the conditions/lifestyle factors that are often overlooked? Just how many people fall into this category? Remember it does not necessarily have to be you who have the medical issue/lifestyle factor. If you want a pension for your spouse in the event of your death, then an enhancement can also be provided if he or she has a qualifying condition/lifestyle issue.

Lifestyle factors such as smoking, high alcohol consumption and being overweight can all be taken into consideration and will sometimes qualify on their own. Coupled with former/current occupation and post code regions, the list of acceptability for an enhancement continues to grow. Also many conditions that have been previously overlooked can now qualify for an enhanced annuity either separately, or in combination with other issues. There is now significant new evidence for medical conditions that have previously not been considered when evaluating whether someone can obtain an enhanced annuity. Conditions such as Diabetes, Asthma, Depression, Dementia and many more can all be eligible for enhanced terms (although not always independently) and this evidence shows that the majority of retirees may have conditions that could qualify.

Richard Houghton, Director of Annuities 4 U, has found that his experience has shown the difference this can make to retirees. “I would say to everybody to look at finding the best rate using the open market, and to investigate whether each client could qualify for an enhanced annuity. It’s a once in a lifetime decision, and one that will make a difference to their retirement.”.

If you are about to retire, it is vital you get the best advice you can on this issue as any increase in income will last for life.

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