Best Pension Annuity Rates| Impaired Life Annuity
Best Pension Annuity Rates
When you finally reach the age to consider your Pension options, one thing you will be offered is the option to purchase an annuity, this is an income for life usually paid monthly that is exchanged for a large part of your Pension Fund.
Now what usually happens is that this Annuity will be provided by the same firm that usually provides you with your Pension. This is because many do not make it clear that you can take the Open Market Option to anther provider in the market place in order to obtain a better Annuity Rate, i.e. more income for the same investment amount.
Now the Best Pension Annuity Rates for you depend on many factors but these are some of the most important ones for you to consider. Ccommercial terms, depending on particular organisations need to bring in a certain class of business they may offer better rates. Your health, those in poor health (or those of you who smoke) will often get substantially better Annuity Rates. Geographic or Postcode areas can be an issue for some providers, and finally you should consider the following how you take your Annuity, or income for life. The options are usually Monthly, Quarterly or Yearly, and a paid in advance or arrears, with or without a guarantee period (which means if you die the income is potentially still paid to your estate).
You should of course make sure that all your options are compared before you make the final decision, shopping around could make you up to 30% better of when compared to accepting the rates offered by your provider. Currently in the UK there are over 150 Providers of Annuities and many of these are consistently poor. For those of you with what are known as Impaired Lives – where there is some history of illness there is almost a guarantee that an excellent annuity rate that can be obtained.
The Best Annuity Rates are not always offered by your existing provider and this is something the Financial Services Authority (FSA) have been looking at for some time now and still have not amended the system sufficiently.
You should start to consider your Pension Options at least 6 months before your retirement date and this will make sure you have all of the information well before retiring.
You can of course do much of this yourself using some of the online comparison services on the internet, however you should really seek specialist advice from your usual Independent Financial Expert. Do not approach any of the UK Banks or Building Societies as most of them only provide advice from their own product ranges.
There is a lot you can do you increase your income in retirement and of course obtaining an extra 20 or 30 percent on your Retirement Income has to be worth the little leg work it takes to shop around. This increase in income is paid for life remember.
As a final point Annuity payments are taxable with the Income Tax being deducted at source.
Richard Smith