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Free Annuity Information
1. How long does it take to arrange an annuity?
Annuities are generally very quick to set up, but can be subject to delays from the pension provider (assuming the pension provider is different to the one you purchase the annuity from), who sometimes take a considerable amount of time to transfer the funds to your chosen annuity provider. An annuity usually takes between 3 and 8 weeks to set up.
2. Is there a difference between annuity providers?
The features of an annuity are generally the same, but the type of customer that an annuity provider wishes to attract varies from company to company. When considering which annuity provider to choose, take into account the rate you are offered and the financial strength and stability of the company bearing in mind you will be with the same provider for life.
3. Can I alter the annuity once it has started?
Conventional annuities have a short cooling off period at the start, but once this period has passed you can’t move it to another annuity provider or change the options you selected when you initially purchased the annuity.
4. Is my annuity rate guaranteed?
Once a conventional annuity is set up, the rate is guaranteed for life. However, rates may change between the time of receiving an illustration from the annuity provider and your pension funds being released from your pension provider.
The majority of quotes are guaranteed for two weeks, but if your pension fund has not been transferred to your annuity provider during that time and the annuity provider changes their rate, then the income you receive from your annuity will also change.
If this income is significantly less than you were quoted, the annuity provider will issue a final quote for acceptance. You do not have to accept this quote and can send the funds back to the pension provider and onto another annuity provider.
All options are still available to you until you accept the final quotation.
5. How is my annuity taxed?
Annuities are taxed at source, as earned income under Pay As You Earn (PAYE).
6. What happens if the company providing the annuity goes bankrupt?
The Financial Services Compensation Scheme (FSCS) covers annuities and annuity providers and is there as a last resort in an emergency situation like this if a company is unable to make it’s payments.
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