“Retirees with annuities have fewer affordability issues”

Nov 18, 2024 | Pensions, Retirement

An independent (financial adviser’s) view

I’m not sure that the results of this survey are as straightforward as they appear. Yes, if you take out an annuity, you will know how much will be coming in each month. Those for whom we would recommend an annuity, however, may have little else in the way of guaranteed income and need some sort of underpin to make sure that they can keep the show on the road and cover their day to day expenses. So, yes, if we’ve done our job properly, they will have more peace of mind and less money stress. What they won’t have is the flexibility and potential access to extra cash that leaving a pension in drawdown might provide which is why, if the sums add up, and despite Rachel’s IHT raid, using a pension flexibly can still be the better option for many. And what happens if you suddenly need more than your guaranteed income, for care costs or to support those aging children you thought would be self-sufficient many years ago? The thing is,  everyone is different and needs, if we’re doing our job, the ‘tailored advice’ of which most websites boast. Rightly, we hope.

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