A GAR is otherwise known as a Guaranteed Annuity Rate. These are rarely offered in today’s pension schemes but were quite common in pension schemes written in the 1960’s through to the mid 1980’s.
This guaranteed annuity rate is the minimum income that the pension scheme holder must offer you as an annuity when you retire, so you have a minimum income guaranteed. These are often more generous than the annuity rates you could get at the moment, typicaly an annuity rate in excess of 10%. If you are lucky enough to have one of these GAR benefits on a pension scheme then it could be worth hanging onto unless the fees are eroding your funds.
When you come to retire, if typical annuity rates are better than your GAR is offering you, then you still have the option to shop around anyway, so you can’t lose. If unsure, always seek specialist financial advice. For an instant annuity quote, complete the enquiry form on the right hand side.
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