Advice on Delaying Your Annuity

Delaying your annuity

Pensioners are no longer obligated to buy a pension annuity by their 75th birthday and neither is it mandatory to start drawing retirement income on the date that was originally chosen for retirement.

You can delay taking your retirement income depending on the rules or the contract terms of your specific pension scheme. You can also delay taking your state pension, for example, if you want to continue working or saving more into it. This will not prevent you from taking your retirement income and any tax-free cash.

But there is little to be gained from delaying your annuity – in fact, you may end up losing out. For starters, you could end up being taxed if you die or take a lump sum due to serious ill health before you secure your annuity after your 75th birthday.

And delaying your annuity in the hope of securing a better deal at a later date could also be counterproductive - you may not live to see benefits. Experts recommend just buying an annuity when it is needed rather than delaying it.

Pensions

Delaying your annuity

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