_Best annuity rates
__
Best annuity rates - Annuity rates are changing all the time. With an ageing population and the need to fund an income throughout ever increasing periods, annuity rates have dropped significantly over the past 30 years. Finding the right annuity can substantially increase the level of income you receive. To ensure you do not lock yourself into a rate, only later to find you could have got a better deal elsewhere, it is important to do your research. By requesting a quote from us we can do all the research for you. We will take details of your personal circumstances and desired options to all the providers, in order to find you the best company. Do not accept the first offer from your pension provider. There can be up to a 40% difference between your initial quote and one which can be found by using the open market option.
There are many standard rate tables which can be viewed in the Sunday papers which give estimates based on standard ages, smoker rates and fund size. These, however, do not take into consideration your personal circumstances. There has been a significant increase in the last few years of people taking up Enhanced Annuities, where medical history and lifestyle choices can increase the level of income you receive. It is only through peoples’ awareness and education on these matters that these numbers have risen. There are many people who could have qualified when they took their annuities, but because they either took no advice or were unaware, they have locked themselves into incomes lower than those to which they were entitled.
Speak to one of our specialists to find out if you quality for an increased income.
Some factors which may affect the rate you receive
• Male or female
• Age
• Smoker
• Fund size
• Height and weight
• Medical history
• Even your postcode
Every provider will have a demographic to which they provide a more favourable income. Some may have favourable rates for smokers; other may offer more attractive rates to those fit and healthy over age 70. Listed below are some of the providers we use and we will ask them all to quote to ensure we find the best deal to suit your circumstances
A pension annuity will provide you with an income throughout your retirement irrespective of how long you live. The income will be based on the size of the pension fund which you have built up throughout your career. You can take 25% of this as a tax free lump sum and the remainder must be taken as an income.
The annuity is purchased with the sum which you have built up in your pension fund. However you are not obliged take an annuity from your existing pension provider. You have the right to shop around using the Open Market Option.
The way you receive your income is up to you. Some of the choices include
Level Annuity
A Level Annuity is the most popular option. It provides a set level of income year after year which does not change. It has the advantage of providing a higher level of income in the early years in comparison with an annuity which increases each year. The major disadvantage, however, is that your income will not increase as the cost of living increases.
Increasing annuity
An Increasing Annuity rises each year, as opposed to a Level Annuity, which stays the same. The advantage is that over time, as the cost of living increases, so does your income, allowing your money to keep its real value. The disadvantage is that in the early years you will receive a smaller income than one from a Level Annuity.
There are two main way to increase your income;
1) An RPI linked annuity which increases your income in line with the Retail Price Index ( the common measure of inflation )
2) An Escalating Annuity, which rises at set levels each year.
RPI Linked
To keep your income in line with the real cost of living, an RPI Annuity links your income to the official measure of the increasing cost of living. RPI or Retail Price Index measures a basket of goods and services which the typical person would buy. As this measures the actual increase in the cost of living, it effectively inflation-proofs your income, meaning that it keeps its real spending power.
Escalating Annuity
Inflation can erode the real value of your monthly income. Over time the cost of goods generally increases. If your pension income is not increasing at least in line with inflation, you will be able to buy less and less. To mitigate against this, an Escalating Annuity increases each year at a pre-determined level. This means that your income will increase year on year at a set rate, allowing you to maintain your standard of living. The disadvantage, however, is that in the early years your income will be less than if you had chosen a Level Annuity.
Enhanced Annuity
An Enhanced Annuity takes into consideration factors which may affect your life expectancy. An Enhanced Annuity is designed to provide more income in the early years of retirement. Factors such as whether you smoke, take medication or have been hospitalised in the past can affect the income you receive. It is estimated that around 40% of retirees could increase their income through an Enhanced Annuity.
Single Annuity
A Single Life Annuity provides income to one person only. If the annuitant dies the payments usually cease (unless they die within a Guaranteed Period which continues to pay out for a limited number of years). This may be suitable if you do not have a spouse, partner or anyone who is dependant on your income. The income will be higher on a Single Life basis than on a Joint Life Annuity.
Joint Annuity
A Joint Life Annuity covers two parties, and will continue to pay out to the remaining spouse or partner for the rest of their life. This option is more expensive than a Single Life Annuity as it is doubling the risk to the insurer. It is often used for couples where one party may have no pension savings, and they therefore effectively share the pension.
Advantages
1. Guaranteed income, you know your income from day one until the day you die
2. You may be entitled to an enhanced rate increasing the income you receive
3. Simple product
4. Not exposed to any investment risk
Disadvantages
1. Annuity rates have decreased over the last 20 years, as we now live longer
2. You cannot change your mind
3. Expensive to ‘bolt on’ options such as a spouse’s benefit or 10-year guarantee
4. When you die so does your annuity income
5. Your income will probably not provide the same purchasing power in 15 years’ time if you choose a level annuity, as the cost of living is likely to increase.
Best annuity rates
Best annuity rates - Annuity rates are changing all the time. With an ageing population and the need to fund an income throughout ever increasing periods, annuity rates have dropped significantly over the past 30 years. Finding the right annuity can substantially increase the level of income you receive. To ensure you do not lock yourself into a rate, only later to find you could have got a better deal elsewhere, it is important to do your research. By requesting a quote from us we can do all the research for you. We will take details of your personal circumstances and desired options to all the providers, in order to find you the best company. Do not accept the first offer from your pension provider. There can be up to a 40% difference between your initial quote and one which can be found by using the open market option.
There are many standard rate tables which can be viewed in the Sunday papers which give estimates based on standard ages, smoker rates and fund size. These, however, do not take into consideration your personal circumstances. There has been a significant increase in the last few years of people taking up Enhanced Annuities, where medical history and lifestyle choices can increase the level of income you receive. It is only through peoples’ awareness and education on these matters that these numbers have risen. There are many people who could have qualified when they took their annuities, but because they either took no advice or were unaware, they have locked themselves into incomes lower than those to which they were entitled.
Speak to one of our specialists to find out if you quality for an increased income.
Some factors which may affect the rate you receive
• Male or female
• Age
• Smoker
• Fund size
• Height and weight
• Medical history
• Even your postcode
Every provider will have a demographic to which they provide a more favourable income. Some may have favourable rates for smokers; other may offer more attractive rates to those fit and healthy over age 70. Listed below are some of the providers we use and we will ask them all to quote to ensure we find the best deal to suit your circumstances
A pension annuity will provide you with an income throughout your retirement irrespective of how long you live. The income will be based on the size of the pension fund which you have built up throughout your career. You can take 25% of this as a tax free lump sum and the remainder must be taken as an income.
The annuity is purchased with the sum which you have built up in your pension fund. However you are not obliged take an annuity from your existing pension provider. You have the right to shop around using the Open Market Option.
The way you receive your income is up to you. Some of the choices include
Level Annuity
A Level Annuity is the most popular option. It provides a set level of income year after year which does not change. It has the advantage of providing a higher level of income in the early years in comparison with an annuity which increases each year. The major disadvantage, however, is that your income will not increase as the cost of living increases.
Increasing annuity
An Increasing Annuity rises each year, as opposed to a Level Annuity, which stays the same. The advantage is that over time, as the cost of living increases, so does your income, allowing your money to keep its real value. The disadvantage is that in the early years you will receive a smaller income than one from a Level Annuity.
There are two main way to increase your income;
1) An RPI linked annuity which increases your income in line with the Retail Price Index ( the common measure of inflation )
2) An Escalating Annuity, which rises at set levels each year.
RPI Linked
To keep your income in line with the real cost of living, an RPI Annuity links your income to the official measure of the increasing cost of living. RPI or Retail Price Index measures a basket of goods and services which the typical person would buy. As this measures the actual increase in the cost of living, it effectively inflation-proofs your income, meaning that it keeps its real spending power.
Escalating Annuity
Inflation can erode the real value of your monthly income. Over time the cost of goods generally increases. If your pension income is not increasing at least in line with inflation, you will be able to buy less and less. To mitigate against this, an Escalating Annuity increases each year at a pre-determined level. This means that your income will increase year on year at a set rate, allowing you to maintain your standard of living. The disadvantage, however, is that in the early years your income will be less than if you had chosen a Level Annuity.
Enhanced Annuity
An Enhanced Annuity takes into consideration factors which may affect your life expectancy. An Enhanced Annuity is designed to provide more income in the early years of retirement. Factors such as whether you smoke, take medication or have been hospitalised in the past can affect the income you receive. It is estimated that around 40% of retirees could increase their income through an Enhanced Annuity.
Single Annuity
A Single Life Annuity provides income to one person only. If the annuitant dies the payments usually cease (unless they die within a Guaranteed Period which continues to pay out for a limited number of years). This may be suitable if you do not have a spouse, partner or anyone who is dependant on your income. The income will be higher on a Single Life basis than on a Joint Life Annuity.
Joint Annuity
A Joint Life Annuity covers two parties, and will continue to pay out to the remaining spouse or partner for the rest of their life. This option is more expensive than a Single Life Annuity as it is doubling the risk to the insurer. It is often used for couples where one party may have no pension savings, and they therefore effectively share the pension.
Advantages
1. Guaranteed income, you know your income from day one until the day you die
2. You may be entitled to an enhanced rate increasing the income you receive
3. Simple product
4. Not exposed to any investment risk
Disadvantages
1. Annuity rates have decreased over the last 20 years, as we now live longer
2. You cannot change your mind
3. Expensive to ‘bolt on’ options such as a spouse’s benefit or 10-year guarantee
4. When you die so does your annuity income
5. Your income will probably not provide the same purchasing power in 15 years’ time if you choose a level annuity, as the cost of living is likely to increase.
Best annuity rates