Fixed Annuity Rates

When looking for fixed annuity rates you need to consider a few things before you rush in and buy an annuity from your insurance company. Around 40% of retirees qualify for Fixed annuity rates with enhancements for lifestyle or medical conditions.

fixed annuity rates

40% qualify for enhanced fixed annuity rates

Industry figures show that around 40% of retirees could qualify for enhanced fixed annuity rates, not because of serious health issues as you might expect but for lifestyle or minor medical problems.

These minor health problems can be as simple as BMI (Body Mass Index) which to you and me is simply being overweight for our height.

Fixed Annuity Rate options

These are the options that are available with fixed annuity rates:

  • Tax Free Cash
  • Spouse/Partner Pension
  • Frequency of income
  • Income paid in advance or in arrears
  • Increase in Payment (Escalation)
  • Guaranteed payment period

Of course some of these will not matter too much to you.

The first on the list is tax free cash and you can take a maximum of 25% of the value of your pension fund before you buy an annuity. If you have a spouse then you should consider buying a continuing pension for them after you have died. Most insurance companies will allow you to take payment of your income either, monthly, quarterly, half yearly or annually, so you have complete flexibility of when you fixed annuity rates are paid to you.

AnnuitySupermarket always recommend that you seek the help of a specialist annuity service to help you get as much of an enhancement as you possible can. The annuity specialist will research the whole market to find you the best fixed annuity rates.

Index Linked Annuity Rates

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.”

index linked annuity rates

Annuity Calculator – Aviva online retirement income calculator

Aviva (formerly Norwich Union) and one of the major providers in the retirement market has launched a new online annuity calculator. It has a simple interactive graphic interface and it’s designed to make it easier for customers to understand the annuity options available to them and to work out how much income they may get from their pension fund.

Kevin Stelfox, Sales Director at retirement specialist Retirement Solutions said, “this online annuity calculator can help you understand how much your retirement income may be from your pension fund. You do not have to buy your annuity from Aviva to use the calculator, it is available for anyone to use. As with any financial services product it is important to seek independent financial advice before making a purchase”

Clive Bolton, “at retirement” director for Aviva, said: “Many people still don’t take an active role in buying their annuity and we believe this is because they think it’s a complex process. The trouble is – when you buy an annuity that’s the income you will receive for the rest of your life. So if you don’t shop around to get the best deal, it could literally cost you thousands of pounds over the years.

For independent advice on the best annuity options and whole of market research contact

Best Annuity Rates – from the Open Market Option

The best annuity rates for your retirement years will probably be found by using the open market option. The open market option gives you the right to take your pension fund and search the entire annuityproviders to get the best annuity rates.

There are big differences between the worst pension you can get for your pension fund and the best pension you can get, these differences can be 15-20% which means you could be missing out on an extra 20% of income each month in retirement. So on a pension of £800 per month with the worst provider you might get £1,000 or more with the best provider. Not many people would want to throw that sort of money away.

It is always worth exploring the open market option to find the best annuity rates no matter what the size of your pension fund.

open market option

Annuities – Don’t Put All Your Eggs In One basket

When you purchase annuities don’t put all your eggs in one basket. You can phase your retirement income by using part of your pension fund initially and the rest of it later. With phased retirement it is possible to phase your retirement in an as many steps as you need.

You may have savings that you can use in the early years of your retirement and will not need such a large income from your annuities. It is very easy to just exchange a part of your pension fund for an annuity giving the amount of income you need at that point. Most pension funds are split into clusters and you can just en cash the amount of clusters needed to provide the income.

Once you are retired you could cash the remaining clusters as and when required. There are also death benefit advantages to doing this as the remaining clusters in the pension fund would be paid tax-free to your estate on death.

Get Annuity Advice

There are many advantages to phased retirement, but it is always wise to seek annuity advice from an independent financial adviser to ensure you do things in the most efficient way.

Long Term Care Annuities

In the later years of retirement many people need help with activities of daily living such as washing, dressing, feeding, toileting, mobility and travel. Eventually you may need residential care or move into a nursing home. This care is generally referred to as long-term care and obviously will need to be paid for but the unknown factors are:

  • Whether you will need long term care
  • When you will need it
  • How much will it cost per annum
  • How long you will need to pay for it

A few specialist annuity providers have now developed long-term care annuity products because they recognise the suitability of an annuity as a way to meet the ongoing cost of long-term care.  The annuity payments can be made direct to the registered care provider, so the annuitant has no tax liability.

As usually the age of a person entering into long term is high, their life expectancy is relevantly short, which means the annuity provider will be able to pay higher annuity rates. A the same time because of the age the retirees are also likely to qualify for aenhanced annuity rates, which will again lead to an improved annuity income.

Long-term care annuities are just one of the funding choices available to retirees entering long-term care. They are cost-effective, an excellent way of ensuring a guaranteed lifetime income to offset the cost of long-term care, and provide peace of mind.

If you are interested in providing for your long-term care, or if you wish to enquire on behalf of a friend, please complete our enquiry form or call our freephone number.

Prudential Annuities – 40% Qualify For Enhanced Rates

If you have a Prudential Pension and you are nearing retirement looking to purchase a Prudential annuity then you need to use the open market option. 40% of people who shop around on the open market looking for Prudential annuities qualify for enhanced annuities and could get around 30% more income in retirement.

Do Prudential Pension Annuity Rates have Enhanced Rates?

Prudential do have enhanced rates but they may not necessarily offer them to you. Even if they do offer you an enhanced Prudential annuity rates it is still worth shopping around on the annuitysupermarket to see if you can get better rates than Prudential are offering.

What qualifies for enhanced rates that prudential annuities dont?

Things like: Postcode where you live, if you smoke or not and what and how much you smoke, your height and weight, certain medication you take, your alcohol intake each week. If you think you may qualify then one of advisers can take your details and check if you qualify.

With annuity rates the lowest they have been for decades it pays to make sure you check if the Prudential annuity rate you are offered can be bettered on the open  market.

Annuity Options

When increases in age, the subject of people’s disagreements over time. When my husband, Dave, and I were newlyweds, the first argument we had was what to have for dinner during at the hotel restaurant during our honeymoon. Then the arguments evolved into what to name our first child, and then on to what type of house we should buy and how we should pay for it, etc.. this time, Greg and I have been arguing and deliberating on pension annuities — whether or not to apply for an Open Market Option or not, though I believe this is more deliberating than arguing, given the seriousness of the subject.

We have talked to professional advisers and even asked for second opinions, and we finally decided that we would have to ultimately decide whether an open market option would be most favorable for us or not. One advantage of this option is that our pension increases over time. The disadvantage is that there is no absolute guarantee that we would live long enough to enjoy the full benefits of this type of arrangement. Another disadvantage to this is that the starting income we would get would be lower compared to other pension annuity arrangements.

Dave is for the open market option. Regarding the issue of low starting income, he insisted we could use our savings. But we’ve decided earlier (years ago, actually) to use these finances for a new vacation home. Oh well.

What you need to know about Annuities

I was on the verge of finally purchasing a pension annuity among the many others I have checked earlier, but then I decided to hold off the decision. The reason? I discovered life annuities. To anyone who might think this is common knowledge, I beg your pardon. I have only recently thought about such things as pension annuities due to my recently busy lifestyle.

Anyway, I think it would be worth mentioning that I was frustrated the first time I learned that ill people, smokers, heavy drinkers, etc. would actually be paid more than healthy people. For a person whose paycheck is simply not as big as I would want it to be, this posed a problem. I understand the reason for this mechanic, but still!

Then yesterday, I happened to mention this in passing to an also nearing-retiring friend, and he mentioned life annuities, which I discovered, upon research, is more favorable than the ordinary pension annuity, and that it would be a good way of maximizing one’s pension income. (I also learned something else very interesting: healthy people are the common clients.)

Of course, as I am not an expert in this area and still barely know about it, and so I shall hold off my decision until I consult a professional annuity adviser.

A Good Future Investment

Annuities can convert your money to make it bigger at the time you are about to receive it. A higher amount of pension can be very advantageous especially during retirement years.

The best way to prepare for a secured future is to start investing today. While you are still perfectly healthy earning a living, it is a good idea to prepare some things for the future so that when the retirement years come, you do not need to worry about anything. You can fully enjoy your retirement years by doing some pleasurable activities at your preferred home. Whether you are in the suburbs or city, you can spend for anything by using your hard-earned retirement benefit or your pension.

Before you reach your retirement, you can make your pension amount into a higher one by doing an annuity purchase. This process allows you to receive your pension at a higher amount depending on the kind of purchase that you decide on. By dealing with a reliable insurance company, you can get the best pension annuities for your future use. You will never experience stress in your future as long as you have a good preparation for it. Being financially prepared for the future will surely make your golden years a fruitful one. Make a good choice of annuity at this present time and never worry about your future. There are more things to explore and enjoy during this part of your lifetime.