Annuities > Delaying Your Annuity

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Delaying Your Annuity

When economic conditions are uncertain, many people may choose to put off buying an annuity with their pension.

This is known as delaying your annuity. For instance, if a pension fund is linked to an investment fund, and this is performing badly due to current market conditions, many pension holders may wish to defer their pension annuity for a certain period.

Is deferring my annuity a good idea?

Delaying your annuity may be a good idea, but it is a decision that should be thought through in detail. There are a number of important questions that those considering delaying buying their annuity should ask.

For instance, can you afford to forego the income if you have already retired? Will the situation have improved and markets recovered after the delay? If interest rates fall, what will happen to your pension? How will annuity rates changed over this period? Will you qualify for an enhanced or impaired annuity after deferring?

Depending on your individual pension circumstances, it may make good financial sense to delay your annuity, but the above points should be considered before making a decision.

How do I find out more about annuities?

Please click here to read the Pensions.co.uk guide to pension annuities. Because some of the terms relating to this product are confusing, please also visit our glossary of terms for a full explanation of the jargon.