Q. I’m just coming up to retirement and have scraped up to around £180,000 in my pension fund. I know I can take 25% as a lump sum, and the pension company says the rest will buy an annuity, is that the best thing? Silvia Hemmings

A. This is the single most important financial decision of your life, as once done you can’t change it. Your question scared the pants off me, not due to getting an annuity, which is a payment each year for the rest of your life, but because of your “the pension company says” line.

Let me shout something from the rooftops to anyone nearing retirement. NEVER just accept your pension company’s annuity rate, it’s a competitive market and you’ve A RIGHT to take your money to any provider.

This has a big impact. For a 65 year old woman with a £200,000 pension the best standard annuity pays £14,800 a year, while a poor one pays £13,000. If you lived to 90 that’s a £45,000 difference. It’s such a big decision, its one of the times I’m a fan of getting Independent Financial Advice.

Martin Lewis, Money Saving Expert, News of the World 31 August 2008

And more……..

PLEASE CLICK ON THE LINKS BELOW FOR SOME BACKGROUND INFO:

http://www.saga.co.uk/money-shop/annuity/

http://uk.biz.yahoo.com/03062008/401/annuities-mis-sold.html

http://www.which.co.uk/advice/annuities-explained/buying-an-annuity/index.jsp

http://www.mirror.co.uk/news/city-news/2008/05/16/get-a-bigger-pension-pot-115875-20419475/