FSA Annuity Rates
One of the first places many of those approaching retirement look for guidance on annuities in the FSA’s own website. Here you can find FSA annuity tables showing some snapshot rates from the leading UK annuity providers. The site allows you to enter some details by answering 10 questions including your age, gender, location, fund size and whether you want a single or joint life annuity. Once you have inputted this data the site produces a number of illustrative annuity rates including standard rates, rates for smokers as well as displaying income levels for those who want to include escalations. One thing to note is that the site is not designed to recommend one annuity provider over another but to instead act as a broad, overall guide to what income you might expect from your pension fund. However, many retirees may not be aware of this fact as comparison engines in other areas of insurance can produce accurate quotes that can be completed online.
Some have criticised the FSA tables in the past for not doing enough to encourage users to shop around for an annuity using the open market option. For example contacting the top provider from the FSA table may not be the best rate available as an annuity quote should be done on an individual, bespoke basis using specialist advice. The person buying the annuity needs to be asked a series of detailed questions including information about their health to see if they are eligible for higher paying, enhanced annuities. These types of annuities are for those retirees who have a medical condition or lifestyle choice that will reduce their life expectancy. Although the majority of annuitants qualify for enhancements, only around 10% of all annuities sold each are enhanced as not all providers offer them.
Another point worth mentioning is that not all annuity providers share their rates publicly, only open market providers. Moreover some providers may have rates 10 or 15 percent lower than more competitive open market providers. So if you do want to ensure you get the very best rate possible it is imperative that you speak to an annuity specialist or an independent financial advisor. An annuity is a once is a lifetime event so making the right choice first time is vital. Many providers will happily sell you a poor value annuity so to ensure you don’t miss out on a higher retirement income compare the market for the best rates. Although it takes longer than merely buying from your current pension provider it could mean thousands of pounds of extra income over the lifespan of your retirement. Annuity rates have fallen to a record low so getting the best deal now is more vital than ever.
