Article Abstract:
Home income plans (HIPs) allow retired people to gain an income from the value of their home. They gained a poor reputation when insecure plans ruined a number of elderly investors financially, but regulations have since been tightened. Mortgage income plans allow investors to borrow to purchase an annuity. Some of the annuity is used to repay interest on the sum borrowed. Home reversion plans allow the sale of thw whole or part of a dwelling to an insurer which then provides an annuity or a lump sum.
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Article Abstract:
United Kingdom income drawdown plans are an alternative to buying an annuity which has become more attractive as annuity rates have fallen. Pensioners can use income drawdown plans to put off purchasing an annuity until they are 75-years-old. Investors gain from investment flexibility and retaining control of their capital. These plans are expensive, however, and do involve risks, so they should not be used by investors unless they have a pension fund with a minimum value of 250,000 pounds sterling.
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Article Abstract:
Phased retirement is possible in the United Kingdom where savers have more than one pension scheme. Annuity purchases can be deferred to 75-years-old, following the 1995 Finance Act. Income drawdown allows people to avoid buying an annuity when rates are low, and has tax advantages. Income and phased withdrawal can be combined for increased flexibility. This has advantages such as being able to continue making contributions from part-time work and the like.
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