Annuity warning for retired expats
BRITISH people planning to retire abroad in 2014 should be extra careful about how they use their pensions, after a report has shown that annuities may not be good value for money.
Overseas Guides Company editor Richard Way said: “Many British expats rely on regular income from an annuity after cashing in their pension pots, but unrealistic expectations about what today’s annuities deliver could lead to financial hardship once overseas.”
The report by the Financial Services Consumer Panel highlighted how hefty fees charged by some annuity brokers can eat into a pension pot. These effects can also be compounded by a swing in exchange rates when local currencies are used.