What is an annuity and how does it pay an income in retirement?
An annuity is an insurance product that pays a guaranteed income in your retirement. What should you look for?
If you have a pension where the amount you receive when you retire is not linked to your salary, then you have complete freedom with what you do with the money when you retire (as long as you're aged 55 or over). You can buy an annuity if you want to - although you no longer have to do this. This article explains the basics of what an annuity is, how you buy one and what it does.
The 55% tax charge on pensions - how does it work and what's changing?
The government will abolish the 55% tax charge on pensions in April 2015 – what does the change mean?
If you save into a ‘defined contribution’ pension – one where the amount you have at retirement isn’t directly linked to your salary – there can be a nasty tax sting in the tail. For some people there's a large tax bill if they pass their pension onto others when they die. From April 6th 2015, this tax charge of 55% will be abolished. How will the change work?
Do you know how much tax you'll pay if you take money out of your pension?
Research shows that only one in three people know how much of their pension they pay tax on and many don’t know what they’ll pay
If you’re planning on taking a lump sum out of your pension after April 6th, make sure you understand how much tax you’ll pay on it. Research carried out by Yougov for SavvyWoman and Just Retirement shows that many people are confused about the tax rules on pensions. If you earn £29,000 a year, and have a pension fund of £17,850, you’ll pay tax at 40%.