Getting the best annuity rates in 2014 could mean you get a more favorable income and for a longer period of time. The difference between the best and worst rates on the market could mean a noticeable difference to your retirement standard of living.
Best Annuity Rates from Annuity Supermarket
You’re bound to have questions:
- What sort of lifestyle will I be able to afford when I stop working?
- How much income can I expect from an annuity?
- Will my income be secure for the rest of my life?
Retirement has changed. In fact, with improved healthcare and a better life expectancy than ever before, you’re likely to be retiring in the prime of life, fit and healthy and looking forward to a number of years enjoying life and extra time you will have for yourself! So the last thing you want to be doing is worrying about your finances.
Message from the Money Advice Service
- You do not have to take an annuity from your pension provider
- You have the right to shop around
- 1 in 3 retirees could be eligible for enhanced rates
Start Annuities Shopping Early
You should exercise your Open Market Option – your right to shop around and should begin shopping around for annuities early, giving you plenty of time to weigh up your options and make an informed decision about what’s best for you in your specific circumstances.
IFAs and Annuities
An IFA (Independent Financial Adviser) can help you to make an informed decision about your annuity and retirement income.
If you want to shop around yourself, you could use the Annuity Supermarket annuities calculator as a starting point. Simply fill in your details and we will request annuity quotes for you and then let you know which annuity providers are offering the best options based on your circumstances.
What are Annuities?
Annuities are essentially a way of converting your pension into an income for your retirement years. It will provide you with an income for life, irrespective of how long you live.
There are a number of different types of annuity, each with different benefits and downsides. Given the sheer volume of different types of annuities available, it’s critical that you research annuities before making a decision and ensure you get an annuity that’s right for you. After all, this is a decision that will affect you for the rest of your life.
Annuities income is taxable. The amount of annuity income you will receive depends upon the type of annuity you take, the total pension lump sum you converted into an annuity, the provider you take an annuity with and also your personal health and lifestyle in some cases.
It’s important to note that you are allowed to take up to 25% of your pension fund in the form of a lump sum which is tax free and then put this lump sum straight into a pension annuity. You then have up until your 75th birthday to convert the rest of your fund.
The Best Annuity
The best annuity for you might not be the best annuity for someone else. In deciding what the best annuities options are for you, it’s important to consider the different types of annuities out there.
Many people opt for a conventional lifetime annuity or a level annuity. These give you a regular income that stays the same each year; it will not rise with inflation. Several other possibilities are worth considering to protect you from rising prices and the forecasted increases in the cost of living. Retirement annuities that give some of the best annuity rates also include:
- Increasing annuities. These can provide an income that rises each year, mirroring inflation, for the rest of your life. Or they can rise by a specific percentage each year.
- Guaranteed annuities. These continue to pay an annuity income for a specified period to someone that you nominate, if you were to die relatively soon after retiring.
- Joint-life annuities. A joint life annuity gives your partner some or all of your continuing income if they outlive you.
- Investment-linked annuities. People who have had with profits pensions and who have ended up with a larger pension fund may prefer to invest it in the stock market. This means that your annual annuity income could go down as well as up.
Your personal annuity supermarket checklist
Follow these tips to get the best pension annuity rates in 2013:
- Make the right choice for you. Shop around for the best annuity rates using the open market option and don’t just accept the first quote you are offered.
- Get good advice. It is important to talk to an independent financial adviser who specialises in pension annuities before you make your decision.
- Think about inflation. Get an inflation-proof annuity by choosing a product that will give you increasing pay-outs in line with price rises. Although you’ll start off with a lower annuity income than if you’d chosen a level rate, you will see your income keep pace with prices.