Pensions - Articles - Cautious pensioners could miss window on guarantees

 The proposed changes to pensions, outlined in last month’s Budget, have led to delayed decisions for many people at or approaching retirement age.

 However, a delayed decision on when to take a pension could fall foul of valuable guarantees and leave those policyholders significantly out of pocket.

 Stephen Berry, personal finance specialist at NFU Mutual, commented: “Many people who are at or approaching retirement are delaying pension decisions until 2015 because it may increase the number of options available to them.

 “However, there are hundreds of thousands of policyholders who may risk losing a Guaranteed Annuity Rate – which could be the most valuable option of all. Anyone who took out a pension before 1990 and is now looking to delay when and how they use it should check their policy first.

 “Guaranteed Annuity Rates, often referred to as GARs, offer policyholders a far better income than a standard annuity under current conditions.

 “Although NFU Mutual policyholders can take their guarantees at any point over a designated period of at least 10 years, other GARs are much more inflexible.

 “Some providers still have restrictions on when these guarantees can be taken. With many people now considering their options, it’s critical the policyholder fully understands the true value and conditions of any GARs they hold.

 “Some guarantees are limited to specific dates, usually a 60th, 65th, 70th or 75th birthday, and so it may take years before the opportunity to take the guaranteed rate comes around again, if at all

 “Anyone with one of these valuable guarantees should check with their pension provider on the flexibility of the dates before they make any decisions about their retirement.”