How to Ensure You Get the Best Annuity Rates
Finding the best annuity rates when approaching retirement is vital if you want to be assured of receiving the maximum income possible from an annuity. Because people will only ever have to buy an annuity once (when they are approaching retirement), most do not have an in thoroughness understanding of what an annuity is or how to go about ensuring they get the best deal possible. Although retirees are sent a ‘wake-up’ pack six months prior to retirement which details the various pension options obtainable to them, these are widely seen as ineffective as most people nevertheless do use the Open Market Option (OMO).
However, this without of understanding of the annuity buying course of action results is thousands of pounds worth of possible retirement income being lost every year. This is because you can only ensure you get the best annuity rates possible by shopping around between competitor annuity providers. Unfortunately, most people are blissfully unaware that this is the case, which is why many annuitants accept the first offer from their current annuity provider. Rarely is this offer the best deal possible, meaning they miss out on a potentially higher retirement income as a consequence.
Often they are sold a traditional annuity, which disregards individual circumstances, such as health and lifestyle choices. Particularly, it does not take into account whether or not the person has any health impairments that could qualify them for annuity enhancement. These enhanced annuities equate to a higher annual income, as it is judged that the annuitant has a lower than average life expectancy and consequently their insurer will have to pay out income for a shorter time period.
It is estimated that around 40% of UK annuitants could be eligible for annuity enhancement despite only 10% truly being offered these better rates. To avoid this situation, it is imperative that you acquire annuity quotes from several different insurers. You could visit each one individually, hire an IFA (Independent Financial Adviser) or turn to a pension annuity broker / specialist for expert advice on this matter.