Pension Annuity Rates

Getting the best pension annuity rates is vital in order to maximise your retirement income. To do this you must first compare the market, a process known as the Open Market Option which essentially means shopping around between providers for the best rates possible. This process was introduced back in the mid 1970′s so that those approaching retirement could compare different providers of annuities and not be compelled to take their annuity from the company with which they had been saving their pension. Unfortunately the reality is that many retirees do not bother to compare providers as they feel it is easier and more convenient to take their annuity from their incumbent provider. However, you can only get the very best pension annuity rates by shopping around.

How do I compare providers?

Comparing providers is best done by speaking to an independent financial advisor or annuity broker such as ourselves. We can compare the market for you, saving you the time and hassle of having to ring round providers yourself. Speaking to lots of providers yourself is of course highly impractical which is why it is best to get professional help. Some of the best pension annuity rates available will come from those who qualify for an enhanced annuity. These annuities pay out a higher income because the person who they are offered to is calculated to have a shorter than average life expectancy, meaning the provider is expecting to payout for a shorter number of years.

What impacts on annuity rates?

There are a number of factors which will impact on the pension annuity rates offered to you when you reach retirement. One of the main factors taken into consideration is how old you are when you go to buy an annuity, as this impacts on how long the provider is expected to pay out for. In general terms, the older you are when you buy an annuity, the higher the rate you will be offered. In addition to your age, another factor taken into consideration is your location, as this can also impact upon life expectancy. Those who live in more prosperous areas are generally offered lower rates as the average life expectancy in that area is higher than the rest of the country. Aside from age and location, another key factor insurers look at is your state of health. This is where there is a real opportunity to boost your annuity offer because if you have any past or present medical conditions that can be deemed to impact on your life expectancy, then you could achieve a higher rate. Finally the amount of actual money you have accumulated in your pension fund will also impact on your annuity income, although not directly on rates themselves.