Shopping around for the best deal could really pay off
An annuity provides you with a guaranteed income for life when you retire. You buy an annuity using a lump sum from your pension or, perhaps, from some savings. Annuities remove the worry about having to budget for an unknown period of time. We can help you understand the retirement process and find the right annuity for you.
There’s no going back
Once you’ve bought an annuity there’s no going back, so you’ve got to get it right first time. Depending on the provider you go to, you could increase your income considerably by shopping around.
If you’re not in the best of health, you may also be eligible for an annuity called an ‘enhanced’ or ‘impaired’ annuity. These products pay higher rates because the annuity providers expect to pay the annuity over a shorter time period.
Shop around for the best deal
With most pensions, you automatically have what’s called an ‘open-market option’ (OMO). This means you don’t have to take the pension offered to you by your pension provider, but have the right to take your built-up fund to another provider to obtain a higher annuity rate.
Pension providers are obliged to remind you of your right to take the OMO. The amount of income you will receive from your annuity will vary between different insurance companies, so it’s essential to make comparisons before making your decision.
A pension is a long-term investment, and the fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation. The value of level annuities will be eroded by inflation over time. Once taken, an annuity cannot be changed.