Getting The Best Annuity Rates In A Tough Climate

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by: bluespeckmedia
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Word Count: 499
Date: Wed, 30 Nov 2011 Time: 6:13 AM
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Many of us look forward to retirement as a time when we can finally relax and enjoy life, but finding the right annuity can be a fraught and stressful process, especially in the current economic climate.

The news is full of stories of plummeting annuity rates and retirees being forced to take a smaller pension income than they had expected. While this is worrying there are still some simple steps you can take to maximise your annuity rate even in tough times.

1) Shop around. As with most other financial products it is always a good idea to shop around before you buy in order to get the very best annuity rate for your needs. Don't just plump for the annuity offered to you by your pension provider, you can always go back to it later if you find that they are in fact offering the best deal.

2) Declare the state of your health. You may be able to get an enhanced annuity deal if you are a smoker, have a health condition, or are on medication. Your annuity rate will be based partly on the length of time you are likely to survive, you will get a higher rate if your provider considers that you are likely to pass away sooner.

3) Track down any old pension schemes. If you've changed jobs throughout your career it can be difficult to keep track of what you've paid into where. It's definitely worth tracking down any old pension schemes that you may have paid into in the past, or you could end up losing out.

Because of the slightly lower male life expectancy, if you are a man you are likely to enjoy slightly better annuity rates than if you are a woman. This is set to change towards the end of next year, when distinguishing between the sexes will no longer be possible under UK law. If you are a man you might want to take advantage of the better rates while they still last, rather than delaying.

If annuity rates remain low, you may of course decide to delay taking an annuity altogether, but it is worth considering that annuity rates are not guaranteed to rise again, or they may fall first before they do rise.

If you do decide to delay buying an annuity there may be alternative options available including delaying retirement altogether, staggering your pension income purchases, or taking pension drawdown.

Choosing the right option for income in retirement can be one of the most important financial decisions that we make during our lifetimes and can help secure the financially comfortable later years that many of us hope for. A member of an independent pension advice team can help guide you through the your pension income and retirement options and find the best deal for your money.

About the Author

John T Hughes writes for Independent Financial Advisor, a service that connects consumers to financial advice they can trust, from pensions and annuities to mortgages, investments and savings.