Annuity Rates schemes - what’s the difference?
Many of the annuity trusts entail the conversion of your final salary scheme into a pension provider. The annuitant, which is the term given to people putting money into these investments for the future, can benefit more financially by transferring their pension into an annuity scheme. Immediate annuities options allows the annuitant to make a payment of one lump sum to the provider, receiving regular payments over an agreed period of time. If you choose the regular annuity scheme, an amount is paid to the retirement income provider in regular instalments. In fact, annuity payments to the annuitant can not only provide income for the retired person, but can also be as a result of a settlement from a personal injury claim.
Some of the schemes that provide annuity rates can be compared to life insurance policies, paying out to beneficiaries if the annuitant succumbs to an early death. Deferred annuities are very similar to the immediate option where you pay one single amount up front. However, the person investing their money, usually when approaching retirement age, doesn’t receive any return until the sum begins to earn enough interest. This amount of growth on the initial amount needed to start paying the investor is usually set by the provider and an agreement contract signed by both parties. One popular choice in these policies is the fixed annuity scheme. This option guarantees you the same interest rate which was agreed at the beginning of the scheme until it’s time for the provider to payout.