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SURREY, ENGLAND, April 15, 2013 /24-7PressRelease/ -- Followers of English football will no doubt be aware that the transfer window for the Premier League closed at the end of January, with clubs now unable to transfer players in until the end of the season. But people might not be quite so aware that they themselves are free to shop around and use 'transfers' from multiple pension funds at any time, when buying their pension annuity.
Pension annuities have traditionally been a one-off purchase, which people buy to convert their pension fund savings into an income for life. However, with people changing jobs more often these days, more customers will have multiple pension fund savings 'pots' to buy an annuity with, as Tim Gosden, Head of Strategy for Individual Annuities at Legal & General explains.
"The recent removal of a maximum buying age for annuities in the UK has given people more flexibility to decide when to covert these pots into a retirement income. Many people are choosing to phase-in or defer their retirement these days, continuing to work full or part time beyond their original planned retirement age. Buying more than one annuity could actually suit them by releasing their tax-free lump sum entitlement and income at different times."
Many still prefer to buy just one annuity for simplicity and can choose to consolidate their income payments each year by purchasing an immediate vesting pension (IVP). An IVP is a pension fund arrangement that can receive transfers from one or more existing pension funds with the total proceeds used to immediately buy a pension annuity.
Tim added; "Some annuity providers also offer immediate retirement annuities, which can accept personal payments ('contributions') from outside of an individual's pension fund savings. The provider can then normally add tax relief to the contribution to provide a last minute 'top up' to the amount they have to buy their annuity with, helping to boost their retirement income."
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