Annuity Helper

Annuity Quotes

Rates can vary significantly from one life company to another. Therefore its important you shop around for various annuity quotes to make sure you get the best pension deal. Its usually best to seek the advice of an Independent Financial Adviser (IFA) here, but doing your own research first is also a good idea.

Many people automatically look for comparison tables online similar to the ones often displayed for things like car and household insurance. However annuities are more complex (and far more important) products and such comparison tables may not be as helpful. Regardless of your research method, there are a few things you should be aware of first.

If you are receiving a pension from a personal arrangement, the provider should write to you approximately four to six months before you are due to retire. They should make it clear what they plan to offer you based on the vale held in your pension fund. Importantly they must also make you aware you may shop around for a high pension income. Approximately six weeks prior to your retirement the provider should provide an estimation of the value held in your pension fund. You can (and are advised to) use this figure to compare products available from other providers. This option is known as the ‘Open Market Option’ and has been available since 1975. Despite this, the majority of people still accept their annuity offer from their provider, which can cost tens of thousands of pounds in potential retirement income. Make sure you seek multiple annuity quotes to maximise your income.

Occupational defined contribution pension schemes are different, and here the trustees may buy an annuity for you. However again you can also shop around on the market to compare rates offered by other insurance companies. The trustees of the scheme may do this for you if you ask.

Selecting a lifetime annuity provider is an important decision, as its normally not possible to change your provider once the annuity has been purchased. Therefore its really important you educate yourself first on what to look for.

Before comparing annuity rates make sure you understand the offer from you current provider. There are two initial areas here that are important. Firstly, see if the offer you have is for a guaranteed annuity rate. Do not confuse this with a guarantee period, which is different. A guaranteed annuity rate means the provider must offer a minimum rate for your fund. With the large decrease in annuity rates during the past decade, this could be extremely beneficial. You may be able to receive a higher income than available elsewhere. You should also determine whether your pension provider will charge your fund should you purchase your annuity from a different company.

Don’t forget to make sure you get annuity quotes for the type of annuity you want, not just the type your provider happens to be offering. There are various types of annuities available, and some will be much more appropriate for you individual circumstances than others.