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Frequently Asked Questions

Do I have to take an annuity?

No. Since April 2015, no-one is forced to buy an annuity, there are a number of alternative pension options available to you,

Do I have to purchase an annuity through my current pension provider?

No. You are likely to find the best annuity rates by exercising your 'Open Market Option' and purchasing your annuity through an alternative pension provider. If you have received an annuity quotation from your current pension provider, we can compare this for you free of charge and without obligation. Please note that this only applies to money purchase pension schemes. If income derives from a final salary pension scheme, this may not be an option.

How will my annuity be taxed?

Any income from an annuity is treated as earned income and normal UK tax rules apply.  Please note that this tax treatment depends on individual circumstances and may be subject to change in the future.

I have more than one pension fund, do I need a separate annuity for each one?

No. You are normally able to buy one annuity by accumulating all your pension funds together.

How does a drawdown pension work?

With a Drawdown Pension, you invest your capital and take an income directly from the fund itself by way of 'cash withdrawals'. In the event of your death, the value of your Drawdown pension fund can be paid to your nominated beneficiaries, free of tax if death before age 75, but normally subject to tax at the recipients marginal rate if death after age 75.

When can I purchase an annuity?

You can purchase an annuity anytime from the age of 55, although there may be early retirement penalties depending on your pension provider.

Can I take my tax free cash without taking my pension income yet?

Yes. A drawdown pension allows you to take your tax free cash and leave the remainder of your pension fund invested in a Self-Invested Personal Pension (SIPP), until such time as you decide to draw an income or purchase an annuity.  This facility is also available through a fixed term annuity without any investment risk.

What happens to my annuity income when I die?

There are a number of annuity options available to you, when setting up your annuity. If you do not select any of these annuity options, your annuity payments will not continue in the event of your death.

  • Guaranteed Payment Period - You can normally select a guaranteed period for your annuity of up to 30 years, during which time; if you die your annuity will be paid to your estate or any dependents for the remainder of the guarantee period.
  • Joint Life Annuity - You can opt for a joint life annuity, where a proportion of your annuity income will continue to be paid to your nominated beneficiary for the remainder of their life.
  • Value Protection - Should you die before age 75, any annuity amount remaining after deducting the total gross income you have received in annuity payments from the original pension fund value used to purchase your annuity, will be paid to your estate tax free. If applicable within your chosen annuity plan, if you die after age 75 the 'Value Protection' payment is normally subject to tax at the recipients marginal rate. 

How long will it take to set up my annuity?

This depends largely on your current pension provider and how quickly they transfer your pension fund to your new annuity provider. Setting up an annuity typically takes between six to eight weeks.

My pension fund is quite small, what are my annuity options?

Retirement Line can provide annuity quotations for pension funds as low as £1,000. Alternatively, since 2015, you can take your pension as a lump sum from age 55. You can take 25% tax free and the remainder is subject to income tax at your highest marginal rate.

How much will it cost me to use the annuity services of Retirement Line?

Retirement Line provides information about your annuity options and annuity quotations without charge or any obligation to use our annuity service.

If you decide to proceed, there is no fee to pay for our annuity service, as we will be paid a commission from the annuity provider, which is taken into account when calculating their annuity rate.

What is a Purchased Life Annuity (PLA)?

This is an annuity that is purchased with a lump sum that is not from a pension fund.

Can you give me advice on my options for retirement?

Retirement Line currently operates on a non-advised basis, which means that we do not give advice, just thorough and factual information, in order for you to make your own informed annuity choice. If you would like advice, we can provide you with details of external Independent Financial Advisers and refer you to them. Just ask when you call.

Am I covered by the Financial Services Compensation Scheme (FSCS)?

Please note that the protection of the FSCS will not usually apply for non-advised services. However, your new annuity provider will be covered in the event of default. Please see "How safe is my new annuity provider?"

How safe is my new annuity provider?

In the unlikely event that your annuity provider was to become bankrupt, the insolvency practitioner would first try to find an alternative insurer to take on the liabilities. If however, they could not find an alternative, annuities would be covered by the Financial Services Compensation Scheme (FSCS). Annuities are classed as long-term insurance contracts and the FSCS would cover 100% of the claim with no upper limit. Please note the claim would be based on the value of the annuity, as determined by the insolvency practitioner.

What do I do if I have a complaint?

If you wish to register a complaint, please contact Retirement Line Limited in writing - 52 Forder Way, Hampton, Peterborough PE7 8JB.

Please note that the protection of the Financial Ombudsman Service (FOS) will not usually apply for non-advised services.

What's next?

Retirement Options

Annuity calculator

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