Latest FSA guide provides help with pension annuities and pension fund withdrawal

The FSA today publishes the latest in its series of consumer guides: the ''FSA guide to pension annuities and pension fund withdrawal'' is written for people approaching their retirement. The booklet aims to help them understand the important decisions that will have to be taken when they come to converting their pension fund into an income to last through their retirement.

The different types of annuities available are explained in the guide - level, increasing and investment-linked, as well as the options of using phased retirement and pension fund withdrawal as possible alternatives to buying an annuity until age 75 when this becomes compulsory.

The key messages for consumers are:

Buying an annuity is an important step and you do have choices. These choices are crucial because they affect how well-off you are in retirement.

You should shop around for the best rate before making any decisions. Contrary to popular understanding, people don't have to buy their annuity from the same insurance company they built ther pension fund up with.

There are key questions which you need to think about to help you choose a suitable annuity which meets your needs. Questions include "is the annuity just for you or do you have a spouse you want to provide for?" "If you are in poor health, is a high initial income your priority?"

Annuities are complicated so you should consider getting specialist advice. The booklet provides a list of useful contacts.

Deborah Arnott, head of consumer education at the FSA said:

"We know from calls to our Consumer Helpline that people assume they have no choices when it comes to buying an annuity. But this is definitely not the case and we really urge people approaching retirement age to read out booklet so that they are aware of all the different options available. Buying an annuity is such an important decision and one that will affect how they live for the rest of their lives. We want to help them make the right decision."

The FSA is an independent body set up by government to regulate the financial services industry and to protect consumers.

The new FSA guide to pension annuities and pension fund withdrawal is part of a series of guides and factsheets available from the FSA leafletline. Other guides in the series include; ISAs, repaying your mortgage; financial advice; making a complaint; pensions; pension transfers, the euro; risks of opting out of your employer''s pension scheme and boosting your occupational pension. All publications are available on the FSA website: www.fsa.gov.uk.

Industry and advisers can obtain up to 100 copies of the guide free from the leafletline number 0800 917 3311.

Keywords: Pension, Annuities, Annuity, Pensions

Please note that the annuities and income drawdown information contained within the articles and general text on Annuities Central may not be intended for annuity consumer use, may no longer be current and should not be used by consumers to make financial decisions. It is very important that you don't use this annuity information in isolation to decide which annuity or annuity alternative to buy. Annuity comparisons and pensions information or opinions expressed are made as at the date of this publication and are subject to change without notice. Always seek the help of an annuity broker before you buy an annuity.