Immediate Needs Annuities, also known as Long Term Care Annuities!

Immediate Needs Annuities - Specialist Help & Advice.

An immediate needs annuity policy can be purchased where an elderly relative is already in either residential care or a nursing care home or is about to be admitted. The annuity is paid directly to the care provider for the life of the individual and the Inland Revenue has agreed for this to be paid gross (no tax on the income). An alternative to an immediate needs annuity is a purchased life annuity where the income is paid to the individual and is partially taxed. This is more suitable for people that are in good health and living in their own homes and are looking for a higher guaranteed rate of return from their capital than bank interest to supplement their income.

The Inland Revenue have stated that the amount payable by the annuity can only be equal to or less than the actual charge made by the care home, there cannot be a surplus to the estate, should there be a reduction in the home care fees charged or in the unlikely event the individual returns to their home to look after themselves.

The usual method of purchase is a single lump sum payment in exchange for an income to cover all or part of the costs of long term care for the life of the individual. It is also possible to have different options depending on the circumstances and assets where the immediate needs annuity can be deferred.

Other features that can be added to the annuity are escalation rates and capital protection. Escalation attached to an annuity means the income paid to the care home rises by a fixed percentage each year and protects the income against inflation. Rates can be chosen between 1% and 5% of escalation. Capital protection allows the original capital to be protected in the event of the early death of the individual. The percentage of capital to be protected, up to usually 75%, would be returned to the estate less all income paid to the care home. This option would increase the cost capital cost of the immediate needs annuity.

The Open Market Option Explained

A recent survey showed that 2/3rds of people buy their annuities (pension income) from the same provider with whom they built up their pension.

Many people are unaware that they have the right to give their pension pot to whichever annuity provider will pay them the highest income for life. This is known as an open market option. This can make a significant difference to the level of income you receive and therefore your lifestyle in retirement.

You can shop around and obtain quotations from all of the leading providers yourself, a time consuming exercise. Alternatively you can ask a specialist to do this on your behalf. Please complete our no obligation form and we will obtain a quotation for you based on the highest rates we can achieve for you.

Buying an annuity is one of the most important financial decisions you will ever make as it determines the level of income you will receive from retirement for the rest of your life.
It is therefore imperative that you obtain the best level of income from the pension pot you have built up over your working life to ensure you enjoy the highest quality of life in retirement.
Whether you have already decided or you require advice on the most appropriate annuity, or indeed if phased retirement or income drawdown would be more beneficial, then please complete the no obligation quotation form and we will advise you of the best rate we have to offer.

Will I Pay a Fee?

We are paid by pension providers for the work we do and do not charge you a fee.

Will You Shop Around For Us?

In the past, pension annuity advice has been difficult to find, but now by using our dedicated software we are able to make this specialist advice available to everybody.

Taking time now to shop around is time well spent, but you need to be aware of all your options, not just the annuity option. This is where we can help you.

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