Things we don’t like to talk about:101 – An extra helping for the Overweight



Eat more, Drink more and Smoke: My advice for those looking to maximise their pension….

If you’re Overweight, Smoke, have high blood pressure or
other health issues, for once it’s a good thing, you might qualify for extra income from
your pension in retirement potentially up to 40% more!
According to the Association of British Insurers 1 in every
2 people who retire could qualify for an enhanced annuity. Which means they
could be losing out on extra income in their retirement by selecting a pension
from their existing supplier when they retire.

The Technical Bit

WHAT IS AN ANNUITY?

Usually* when we retire we have to buy a product called an
annuity, in simple terms this is where you give your pension savings to a
company and they promise to pay you an income for the remainder of your life.
We don’t like to talk about it, but this income is based on
statistics for life expectancy, and the healthier that you are the less money
you’ll get. The one time in your life that someone will say “Smoking is good for you” is when you
come to take your pension, the same is true of being overweight.
There are additional options that you can add such as an
income for your spouse if you die, or if you want your income to increase with
inflation each year. The starting income is based on the simple idea of a
guaranteed level income for the rest of your life and each option you choose
reduces the amount they will pay.  

OPEN MARKET OPTION – YOUR RIGHT TO SHOP AROUND

Clearly you can suppose that different companies might want
to compete against each other to get your pension pot, by offering higher
incomes. In 1978 the government introduced the right to shop around for your
annuity, but unfortunately the statistics show that about 60% of people still
don’t shop around, a process referred to as using “Open Market Option” By
shopping around most people can typically get around 10 to 20% more income,
which rises to around 40% more if they qualify for enhancement.
Open Market Option is very simple, all you need do is
contact an Independent Financial Adviser, and they can check which options you
want and find out who will give you the most income. An independent financial
adviser can also see if you would qualify for enhanced annuities, statistically
almost 70% of retirees would have qualified. That’s a huge amount of money lost
each year, simply because of a lack of knowledge.
DALES Independent Financial Advisers, are independent financial
advisers in Newark and Nottingham and can offer Independent retirement advice
on taking your pension. Why not call DALES today to see how much more pension
income you could get, through Open Market Option?
T: 0333 772 9607, T: 0115 832 0265 (Nottingham) or T:01636
87 00 69 (Newark). E: advice@pndales.co.uk.
*Until 6th April 2011 everyone was forced to buy
an annuity by the age of 75, now there is an alternative, but it involves risk
and is not suitable for most people, for most people buying a “pension” when
they retire is still going to be in effectively mandatory as the alternatives
are unsuitable. Interestingly this is something that is in the news today, as
the Pension minister Steve Webb speaking at the party conference, admitted that
there are concerns that annuities may not be the right product for people in
retirement and said the government needed to tackle the issue.
Philip Dales Dip PFS Certs CII (MP & ER)
Philip Dales is principal at DALES Independent Financial
Advisers, based in Newark and Nottingham. He has been an adviser for over 16
years helping many clients with all aspects of financial planning, and
retirement. For more information on this or any other aspect of financial
advice contact t: 0333 772 9607.

Web site update due soon


Long time no post,

We’re in the middle of a major site redesign right now, and will update the blog as and when we expect the site to go live.

Within the new site will be an annuity comparison tool, you will be able to enter the value of your pension fund and find out who will give you the best annuity. A similar tool will exist for life cover, and you will be able to apply for cover online. A mortgage comparison tool will also be added.

With all three of these systems they will as you would expect from DALES independent financial advisers, search and compare the Whole of the Market.

However, it is always worth discussing your situation with an adviser before going ahead. Often with a mortgage while you may see a deal that looks fabulous, its important to remember that even our comparison tool, can not take every part of your situation into account, and has to make some assumptions. Annuities are slightly different, for example your pension may be a S32, and as such not all providers will accept an open market option, or immediate pension purchase, without affecting the level of Tax Free Cash you may be entitled to. With Life cover there is less of an issue with acceptance criteria, here it is more to make sure you buy the most cost effective solution for your situation, is level term assurance or Family income benefit better for your situation? Speak to one of our advisers and we can guide you through the variety of options.

We have offices in both Nottingham and Newark tel: 01636 642 844. DALES Independent Financial Advisers – advice@pndales.co.uk www.pndales.co.uk