Updated: June 24, 2019

Flexible Annuity

A guide to flexible annuities

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Tony Stevens

Author: Tony Stevens - Finance Expert

Updated: June 24, 2019

If you’re looking for reliable retirement income which also offers you flexibility as to how you invest and use your savings, a flexible annuity could be for you. But with the pensions market opening up in recent years to offer greater flexibility in traditional pension plans, it’s more important than ever to know how to successfully navigate the savings and retirement arena.

Once you choose to invest in an annuity, there’s usually no going back. That’s why it’s important to speak to a pensions expert before making any far-reaching decisions.

In this article, we’ll cover…

What is a flexible annuity?

A flexible annuity is a retirement product that provides regular retirement income, either for life or for a set period of time. However, it differs from other annuity types by placing you, the holder, more in control of your investments. A flexible annuity allows you to choose how much income you open the annuity with and adjust income levels whenever you wish.

You also get more freedom to select where and how to invest your savings. For the savvy and hands-on investor, it can be a liberating option for self-securing your financial future. People who are self-employed and have a fluctuating income may also prefer the freedom to vary their levels of investment over time.

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How does a flexible payment annuity work?

A flexible payment annuity is designed to have an accumulation period in which you make payments into the annuity then allow for investment growth before regular payouts begin, known as the decumulation period.

A flexible annuity guarantees a minimum income that remains in place for the rest of the holder’s life, or for an agreed upon period of time. It can turn your retirement savings into a steady, lifelong income while allowing you more freedom than many other pension options.

However, once you opt in with this retirement option, it can be incredibly difficult – or even impossible – to get out. To ensure that a flexible retirement annuity is the right option for you, speak to a pensions advisor here.

Should I get a flexible retirement annuity?

A flexible annuity may provide more control over your investments than other (possible more restrictive) pension options. But this freedom also means taking on more personal responsibility and thus market-related investment risks. The income you can take out could go up or down according to how your investments perform.

However, holders can limit the extent to which annuities income fluctuates since you can select the level of investment risk. Another option for those with less of a risk appetite is to get a fixed or short term annuity.

While some people prefer a retirement product that has greater potential to grow a savings pot over time and provide a guaranteed minimum income, it’s important that investors understand all related risks and fees.

The best way to compare a flexible annuity to other annuity types or retirement products is to speak to an expert pensions advisor. There’s no right or wrong answer to the question of whether or not to get a flexible retirement annuity, but there is a right way to go about making the decision and it involves being fully informed of all options and their respective pros and cons.

Speak to a flexible annuity expert!

Flexible annuities are one of the most versatile retirement options, enabling the holder to choose the level of investment risk for your pension plan or add more funds into the annuity as you are able to.

Finding the right deal for your needs could save or make thousands of pounds and (as that compounds over time) it could leave you considerably better off. Thus a pensions expert with years of experience in connecting investors with the best deal on the market is best placed to assist your search.

Online Money Advisor carefully selects the best pension advisors who are guaranteed to give you the support you need. Give us a call on 0808 189 0463 or make an enquiry and we’ll connect you – free of charge – to the right expert for your situation. There’s absolutely no further obligation or marks to your credit rating!

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Tony Stevens

Tony Stevens

Finance Expert

About the author

Tony has worked in a vastly diverse array of areas in the pensions industry for over 20 years. Tony regularly writes for trade press, usually on topical and pensions pieces as well as acting as a judge at prestigious national events.

Tony is also a highly qualified Independent Financial Adviser in his own right. His mantra has always been “Hope for the best, but plan for the worst”, and believes that the biggest impact that an adviser can have on a client’s life journey is to take them on a journey from generally having little or no real idea of what their retirement will look like, to giving them the understanding of what their retirement looks like now, then helping them navigate a path to what they want their retirement to be.

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