The minimum UK retirement age is increasing to 55

On 6 April 2010 the minimum age at which pension scheme members will be able to access their pension benefits will jump from 50 to 55. Does it affect you?

From this date it will no longer be possible for you to receive an income or a tax-free lump sum from a private pension before your 55th birthday, except on the grounds of very poor health.

How does this affect you?

  • Aged 50 – 54 on 5 April 2010: if you will be aged between 50 and 54 on 5th April 2010 and wish to access your pension benefits in the near future you must do so before 6th April 2010, otherwise you will lose access to your pension for up to five years.
  • Under 50 on 5 April 2010: if you won’t reach age 50 until after 5th April 2010, but were planning to retire before your 55th birthday you will now have to wait until age 55 to receive an income or take a tax-free lump sum from your pension.

If I am going to be between 50 and 54 on 5 April 2010

What options do I have?

There are a number of options available to you – three of the most common options are:

1. Buy an annuity

You could choose to buy an annuity before the change in the minimum retirement age takes place. Annuities provide a regular income, usually for the rest of your life, in return for a lump sum payment from your pension plan.

2. Transfer to an income drawdown plan If you need to withdraw an income from your pension, an income drawdown plan could achieve this for you. This is an alternative to buying an annuity.

It allows you to take an income from all or part of your pension while leaving the rest invested. You can increase and decrease your income, within set limits, to suit your needs.

3. Do nothing You may be sure you won’t need access to your money until age 55

So what do I need to consider?

You should consider taking independent financial advice to discuss the options available and which would be most appropriate for you. Visit our website for more information

Are you getting the best annuity rates?

When purchasing an annuity you may be able to get the best annuity rates by considering if you qualify for enhancements.

Lifestyle Annuities

Lifestyle annuities take into account certain behavioral and environmental factors, as well as medical factors to determine if you have a reduced life expectancy. Any factor that may reduce life expectancy may be considered. These include smoking – 10 cigarettes, or the equivalent cigars or tobacco, a day for the last 10 years, obesity, high cholesterol, hypertension, high blood pressure and diabetes.

Enhanced Annuities

Enhanced annuities pay out more than lifestyle but not as much a fully impaired annuity as they are designed for those with a reduced life expectancy but to a lesser degree than a fully impaired annuity.

Impaired Annuities

An impaired life annuity pays an even higher income for those who have significantly lower life expectancy. The insurer will require a medical report from your doctor (no need for you to have a medical examination). Medical conditions such as; heart attacks, heart surgery or angina, life threatening cancers, major organ diseases e.g. liver or kidney and other life threatening illnesses such as Parkinson’s and strokes will be considered.

Get Quotes

To get the best annuity rates visit call 0800 043 0725

What’s a guaranteed pension annuity?

This type of pension annuity not only guarantees to pay you an income for life – it also guarantees how much income you’ll get. So you know exactly where you stand.

This kind of annuity is also known as traditional or conventional annuity.

How much income you will get from an annuity will mainly depend on two things?

1. Current long term interest rates – when you buy your guaranteed pension annuity you’re locked into it, at today’s rates, for the rest of your life.

2. How long you’re expected to live – this depends largely on your age and sex.

An annuity is an income for life, so once you’ve made your choice and everything has been set up, you can’t change your mind.

To get advice on guaranteed annuities call us free on 0800 043 0725

Understanding Annuities

When you can buy an annuity

For most people, a pension annuity will be purchased between the ages 50 and 75. However the minimum retirement age will rise from 50 to 55 in 2010 and a few people in special circumstances may be able to avoid annuity purchase at age 75, but most people will purchase an Annuity aged between 50 and 75.


The amount your pension fund will buy depends on your age, gender and state of health as these three factors affect how long you are expected to live. The older you are when you buy an annuity, the higher the amount you are likely to be quoted because the annuity provider (an insurance company) is unlikely to have to pay you for as many years as someone who starts taking their annuity income at a younger age.

State of health

Similarly, if you are suffering from a medical condition or illness which is likely to reduce your life expectancy, your annuity provider will pay you more because you are likely to survive fewer years than someone in good health of the same age. The same applies if you are a smoker or obese.


Women tend to live longer than men, so a woman is paid less than a man of the same age and with the same size pension fund.

Spouses’ and partners’ pensions

If you want your spouse or partner to have an income after you die, you will want to buy a ‘joint life’ annuity. This will reduce the amount you receive (compared to if you bought a ‘single life’ annuity), but will guarantee your partner or spouse an income for life after your death. Enter their age in the ‘partner’s age’ box.

You can choose what percentage of your annuity income you want your partner to receive – typically, 100%, 66% or 50%. The higher the amount you choose for your partner, the lower your initial income from the annuity rates will be.

Cash in your pension early

If you are aged 50 plus and considering pension release, the minimum age increases from 50 to 55 in 2010

How do you cash in your pension early?

Pension Release or ‘unlocking’ is the term used for taking the benefits from your pension before you retire and getting up to the maximum tax free cash and/or income.

How much can I release?

The current rules say that you can release a cash lump sum of up to 25% of the value of your pension fund. This is tax free and is know as a ‘Pension Commencement Lump Sum’ (PCLS). In addition, the remaining fund can be used to provide you with an income that might be taxable – depending on your circumstances.

How can I get advice on cashing in my pension early?

If you wish to explore your options further, call retirement solutions on 0800 043 0725

Pension Release is only suitable for a very limited number of people and should be only taken as a last resort. Taking money from your pension now will reduce the amount of income available to you come retirement. This service applies to UK pensions only.

For open market option quotes and the best annuity rates

Enhanced Annuity Rates, Pension Drawdown, Pension Release

Use Equity Release to help boost your annuity

If you find the income from your annuity rates insufficient then you could consider equity release to help increase your income

Background to releasing the value in your home

Assuming you have paid (or almost paid) off your mortgage, the current market value of your home is yours. All you need do is tap into it.

There are various ways you can unlock some of the market value (or equity) in your property. For example you could downsize to a smaller property or one of lower value – perhaps by moving to a different part of the UK where house prices are cheaper.

Downsizing will give you maximum value from your home, but there may be disadvantages such as the hassle, disruption and cost of moving. You may also be very attached to the area where you currently live.Although the value of any inheritance you leave could be reduced, the money could help fund your retirement, or pay for whatever you want – a holiday, home improvements, a new car… it’s up to you.

Understanding Equity Release

If you feel that releasing equity from your property is right for you, there are two main types of scheme currently on the market. This section explains how each works, as well as their advantages and disadvantages.

Lifetime Mortgages

Currently the most popular type of equity release plan is a lifetime mortgage. You borrow a set amount of money against the value of your home, which can be paid in the form of one lump sum. Some plans even allow you to take the money as and when you need it – which may help minimise the amount of interest owed.

You can then spend the money released however you wish. The best way to think of it is as a long-term loan, secured against the value of your property. The loan is paid off when your home is sold. In the meantime, you and your partner continue to live in your home with no interest to pay during your lifetimes. Instead, ‘compound interest’ is added or ‘rolled up’ with the loan. When the time comes, the debt is paid off using the proceeds from the sale of the property. This is usually when the last survivor dies or moves into permanent long-term care.

Lifetime mortgages are regulated by the Financial Services Authority (FSA).


> Typically available to those as young as 55.

> You keep ownership of your own home and can still benefit from any rise in house prices.

> You know how much money you will receive from the scheme at the start.

> There’s the possibility of leaving some equity to your heirs, depending on the size and length of your loan.

> Regulated by the FSA.

If the company is a member of SHIP you will benefit from a no negative equity guarantee.


> Your debt will grow over time, although with some plans this could be limited by releasing your money as and when you need it.

> The entire equity in your property may be exhausted, leaving nothing for your family.

> Your tax position and eligibility for means tested benefits may be affected, as might your options for moving or selling your home in the future.

Your home is safe, and you can live in it for as long as you like.

We believe specialist impartial advice is essential when considering equity release thats why we offer a free initial consultation with one of our experienced equity release advisers with no obligation to proceed any further. We will then leave you to discuss your plans with your family and make up your own mind.

Follow these 5 top tips to get the best annuity rates

To get the best annuity rates follow these top 5 tips:

  1. Choose the best option. Shop around for the best annuity rates using the open market option and don’t just accept what your pension company offers.
  2. Check if you qualify for enhanced rates, if you smoke, have poor health or take some medications then you may be entitled to enhanced annuity rates
  3. Get good advice. It is important to talk to an independent financial adviser who specialises in annuities before you make your decision.
  4. If you have a fund over £100,000 then consider Income Drawdown as well as the annuity option
  5. Think about inflation. You can make your annuity ‘inflation-proof’ by having it icrease in line with price rises, although you’ll start off with a lower income than if you’d chosen a level rate.

Call us on freephone 0800 043 0725 to research the best annuity rates or visit our website

Annuity Rates – Annuity Jargon

Jargon Buster

Accrual rate
The proportion of pensionable earnings you receive as a pension for each year of a pension scheme

A series of fixed payments that are paid at regular intervals – usually until you die.

AVCs – Additional Voluntary Contributions
A pension top-up for an occupational pension. You pay contributions into a scheme run by your employer to boost your main pension.

Contracting out
The facility to leave the State Second Pension (or SERPS) and build up benefits in a personal pension.

FSAVCs – Free-Standing Additional Voluntary Contributions
A pension top-up policy for an occupational pension, but separate from your employer’s pension scheme and normally run by an insurance firm.

Group Personal Pension
A type of personal pension offered by some employers but not classified as an occupational pension scheme
– see Money purchase pension.

Lifetime annuity
A lifetime annuity converts money from your pension fund into pension income, which is taxed. There are different types to suit your circumstances

Money purchase pension
Some occupational pensions and all personal, group personal, stakeholder, FSAVCs and some AVCs are money purchase pensions. Your contributions are invested in, for example, the stockmarket. The size of your fund depends on how much is invested and how well those investments do. At retirement, some or all of the fund may be used to buy an annuity.

Occupational pension
Available through employers and run by pension scheme trustees. There are two types – salary-related (defined benefit) and money purchase (defined contribution).

Personal pension
A pension policy you take out yourself from an insurance company or another financial institution and into which you pay contributions. It may also be offered by employers – see Money purchase pension.

Protected rights pension
The part of your pension fund which was used to contract out of the State Second Pension (or SERPS) that must be used to buy a protected rights annuity.

Salary-related pension scheme (also known as a final salary or defined benefit)
A type of occupational pension. The amount of pension you get is worked out on your salary at or near retirement, or when you left employment, and your pensionable service.

Stakeholder pension
A type of personal pension that has to meet certain standards set by the government.

State Pension
A pension based on your National Insurance contribution record.

State Second Pension
An additional State pension paid on top of your basic State Pension. This used to be called SERPS. Selfemployed people cannot build up a State Second Pension.

Tax-free lump sum
An amount of cash you can take at retirement free of tax set by HRMC. Individual pension schemes may have different rules on the amount of tax free cash you can take.

For the Best Annuity Rates go here

Over 50 Investment News

You can now invest up to an extra £3,000 in your stocks and shares ISA

If you’re 50 or over this tax year, you can take advantage of a great new investment opportunity that’s not immediately available to anyone younger.

What’s changed?

Earlier this year, The Chancellor announced that the ISA limit would be raised from £7,200 (£3,600 for cash ISAs) to £10,200 (£5,100 for cash ISAs). This applies to anyone born on or before 5 April 1960. These limits will change from 6 October 2009, and for everyone else from 6 April 2010. Which means you can invest an extra £3,000 in a tax-efficient stocks and shares ISA before anyone under 50 gets the chance. The value of the tax advantages will depend on your individual circumstances and can change over time.

Good timing when you consider the stock market has recently shown some signs of recovery, although there’s no guarantee it will continue, and savings rates remain low. So if you’re looking for growth potential and tax efficiency from your savings, we can help you make the most of your new increased ISA allowance.

ISAs are designed as medium to long term investments of, for example five years. Both capital and income values may fall as well as rise and are not guaranteed. You might not get back all the money you invest. For new ISAs you can invest a minimum lump sum of £500 or a minimum regular contribution of £50 per month.

Annuity Enhanced Pension For Smokers

For those who smoke at least ten cigarettes a day (or 85 grams of rolling tobacco per week) and have done so for at least the last ten years this has an effect on their life expectancy. This can be taken  into account to give a bigger annuity.

Spot checks and in some cases doctors’ reports to verify the smoking information provided in the application.

For advice and quotes contact Annuity Supermarket on 0800 043 6701