We’re all reminded at regular intervals to do what we can to save up for retirement. It’s important to have something to live on as soon as we’re ready to bid the world of work farewell, although the basic state pension does offer some kind of safety net. However, in many people’s circumstances, living on that alone isn’t enough to help us enjoy retirement.
To make the most of the retirement, it’s important to have at least a little extra money set aside, whether it’s to make paying the bills a bit easier or to pay for something fun like a holiday. This is why saving as soon as you can, even something small like £20 a month, can prove to be handy. There is a big choice to make as to how you receive your retirement fund once you’re able to use it.
Today, there are a number of different pension products to choose from. While all of them involve saving up regularly in order to build a substantial nest egg for you to live on, the way in which the money is spread out varies. Ordinary pensions allow you to take what you need from your fund but don’t always offer much by way of value for money.
As an alternative, annuities can be pretty good for the more sensible pensioner, but why? What makes annuities different from ordinary pensions is that they pay out a certain amount of the money you’ve saved up each year. The percentage of your pension pot received annually does depend on a variety of factors though which can make it hard to work out what you stand out to receive.
Hard to understand?
Using the annuity calculator from My Pension Expert could be the way to work out how much you may stand to receive from an annuity. Despite that, annuity rates do vary depending on long-term illness problems, previous job history (if doing something hazardous such as building work), your finances and until recently, gender. It’s best to think carefully before making a decision on them.