446735002-Pension-Fix-by-Martin-Lewis

✓
✗
PROS
Simple, secure option. You know what your income will be for the rest of
your life, no matter how long you live.
CONS
You’re locking into the annuity rates available at the time, and if these are
low your retirement income will be smaller than potentially possible.
Investment-linked annuities
The concept here is simple: the amount you get for your annuity depends on
the performance of one or more stock market-type investments. In other words,
you’re taking the risk you may get less for the hope you get more.
These annuities expose your pension funds to the rollercoaster ride of
the stock market. While you may hope your annuity will grow over the years,
you could see a drop in income if the underlying investments do not perform
as hoped.
However, there will be a minimum limit below which your annuity income
cannot fall. Investment-linked annuities for all but the very financially savvy
should only be considered after taking independent financial advice (see page
24) and only by those who have other assets to live on, in case the annuity
income drops.
✓
✗
PROS
Possibility of rising retirement income.
CONS
Income levels will fluctuate and reduce in poor investment conditions, and
you will need other assets to live on.
12