A flexible annuity does exactly what is says on the tin, it is more “flexible” than other alternative annuities on the market. Annuities have been criticised by some as being inflexible, but a flexible annuity offers the annuitant more control over how their money is invested. Here we detail the pro’s and cons of a flexible annuity. There are various facets which make up the ‘flexible’ part of this type of annuity including control over investment, income, insurance and inheritability. In short you can control where your money is invested, how much you can withdraw (subject to limits), you can ‘ring-fence” part of your fund so it can be passed on if you die and you can also benefit from so-called survival bonuses where the income that would have been paid to those who pass away is transferred towards those who survive.
Pro’s
1. Lifetime of income – you will receive an income for as long as you live, as you would under a standard annuity.
2. You can choose how your money is invested, you can choose these funds until you reach the age of 80.
Cons
1. One major factor is that your income can go down as well as up. Future annuity payments maybe lower if the performance of the invested funds is poor. You could end up with less money as a consequence.
2. Your income limits could go down on review, meaning you your withdrawal limit will be reduced.
