Rising infaltion erodes the value of any fixed interest annuity therefore you should consider purchasing index linked annuity rates from the open market. Index linked annuity rates mean your retirement income will keep pace with inflation and retain its buying power.
Where do you get index linked annuities?
Nearly all annuity providers will offer you an index linked annuity, but to be sure you buy the best you need to seek advice from an annuity specialist. The different index linked annuity rates you will be offered from each provider can have a wide range of values.
To give you an example using Assureweb to produce index linked annuity quotes for a 100,000 annuity gave the following results:
- Canada Life (4,200)
- Legal & General (4,150)
- Standard Life (4,055)
- AXA ( 4,046)
- Aviva (4,017)
- Prudential (3,862)
- AEGON Scottish Equitable (3,578)
As you can see there is a significant difference between the top rate and the bottom rate. Which explains why you need to shop around.
Kevin Stelfox, Sales Director at annuity specialist Retirement Solutions, said, “There are huge differences in index linked annuity rates between providers. As specialist annuity advisers we search the whole market to find the best rates for our clients using their own individual circumstances.”