“Don’t annuitise yet if you can afford not to” say top advisers – at least until new rules are clear

3rd April 2014


If investors coming up to retirement can afford not take an income, it may be better to ‘sit on your hands’ for a while and not annuitise, advisers say.

Robert Reid, director of Syndaxi Financial Planning says: “Sit on your hands if you can afford to. You might still annuitise, but I wouldn’t dream of pushing someone into an annuity just now. Think of the worst case scenario. What happens if someone dies? And that fund could have still been there.”

Reid says that it is important to consider when and how you take your benefits.

“Timing is going to be everything. You are in a position to look at what you have got and understand what you have got.”

But he also argues that until the detailed rules are out and the current consultation is finished, you are better sitting on your hands. “Let the rules come out and settle, let it be a piece of legislation”.

He says the for example, some older pension plans may require primary legislation to give you the facility to transfer the money out in any case.

Billy Burrows, head of business development at Annuity Line, says: “There are three things customers need to do. This applied before the Budget and much more so now. They need to ask themselves three questions. Is it the right time to take benefits? What is the right sort of product to be in? And thirdly which provider is offering the best rates?

“Taking the first one when is the best time – if people don’t need the cash or the income then clearly it makes sense to wait until there is more clarity.

“If people need the cash and income, there are ways in which to do that. It is early days but clearly insurance companies are working to come up with solutions. LV= have just done a one year fixed rate annuity which might be worth looking at”.


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