Best Annuity Rates News

Life expectancy has increased considerably over this century therefore once you reach retirement in is important to get the best annuity rates from your pension pot, this is because the income from your annuity will probably have to last you on average over 10 years.

The majority of annuities in the UK are provided by the big Insurance Companies such as Prudential, Aviva, Standard Life, AXA and Legal and General to name a few. They all have different annuity rates for different ages, sex and postcode. Because of this it is very important to shop around a few months before you retire. There was a recent article that was published in America that stated that the British spend more time on Christmas shopping than they do on shopping for the best annuity rates.

Shopping around for your annuity is not that difficult and generally perhaps the best way is to consult the advice of an indpendent financial adviser, he or she will then research the whole of the market including some of the annuity providers you probably have not heard of. If you can it is perhaps also better to find a firm of  independent financial advisers that specialise in annuities. There are many such firms an just typing “annuity rates” into Google should bring up a reasonable list of specialist firms.

It is also important to ensure that you check to see if you may qualify for enhanced annuities as these can give a significant increase to your annuity income.

Annuity Supermarket recommends a specialist annuity independent adviser Retirement Solutions and you can reach them on 0800 043 6701

An Independent Financial Adviser is the only financial adviser who can provide advice that is specific and personal to your circumstances from products and services available from the whole market. An IFA will work for you and not the product provider.

Retirement Solutions is an independent financial adviser that specialises in giving advice in the annuities and equity release market.

Retirement Solutions Limited is a whole of market financial adviser. However, we choose to provide advice only in the areas where we have the necessary experience and expertise; annuities and equity release

If you would like us to arrange for an IFA to contact you then please click the form link below. We will then select the IFA who is best suited to advise you.

http://www.formexperts.com/forms/OI31IWVMTT65

Where an individual is aged over 60 (but less than 75) and their total funds from all pension schemes is less than 1% of the Standard Lifetime allowance (SLA) the entire fund can be taken as a lump sum. For the tax year 2009/10, this will equates to £17,500

For example 2008/9 (SLA £1,650,000) if the fund is £16,500 or below, 25% can be taken as tax free cash (£4125) with the balance taken as cash but taxed as earned income.

Time Limit

If you wish to cash-in more than one pension, assuming you meet the qualifying criteria above, you must do so within 12-months of cashing-in the first one.  You will not be able to cash-in any pensions after that 12-month period has expired.

New Rules From 1 December 2009 (occupational schemes only)

These new rules apply to occupational pension schemes only.  They do not apply to personal pensions, stakeholder pension and SIPPs.

They allow small occupational pensions to be cashed-in under triviality rules even if the main rules above have not been met.

The following are the main qualifying criteria:

* You must be between 60 and 75;
* You must not be a controlling director of the sponsoring employer;
* The payment must not exceed £2,000;
* The payment extinguishes your right to benefits under the scheme; and
* There must not have been a transfer-out of the scheme in the 3 years preceding the date of payment; and
* The first 25% of the payment is tax-free, with the remaining 75% taxable under PAYE.

When purchasing an annuity you may be able to get the best annuity rates by considering if you qualify for enhancements.

Lifestyle Annuities

Lifestyle annuities take into account certain behavioral and environmental factors, as well as medical factors to determine if you have a reduced life expectancy. Any factor that may reduce life expectancy may be considered. These include smoking – 10 cigarettes, or the equivalent cigars or tobacco, a day for the last 10 years, obesity, high cholesterol, hypertension, high blood pressure and diabetes.

Enhanced Annuities

Enhanced annuities pay out more than lifestyle but not as much a fully impaired annuity as they are designed for those with a reduced life expectancy but to a lesser degree than a fully impaired annuity.

Impaired Annuities

An impaired life annuity pays an even higher income for those who have significantly lower life expectancy. The insurer will require a medical report from your doctor (no need for you to have a medical examination). Medical conditions such as; heart attacks, heart surgery or angina, life threatening cancers, major organ diseases e.g. liver or kidney and other life threatening illnesses such as Parkinson’s and strokes will be considered.

Get Quotes

To get the best annuity rates visit www.annuitysupermarket.com call 0800 043 0725

This type of pension annuity not only guarantees to pay you an income for life – it also guarantees how much income you’ll get. So you know exactly where you stand.

This kind of annuity is also known as traditional or conventional annuity.

How much income you will get from an annuity will mainly depend on two things?

1. Current long term interest rates – when you buy your guaranteed pension annuity you’re locked into it, at today’s rates, for the rest of your life.

2. How long you’re expected to live – this depends largely on your age and sex.

An annuity is an income for life, so once you’ve made your choice and everything has been set up, you can’t change your mind.

To get advice on guaranteed annuities call us free on 0800 043 0725

When you can buy an annuity

For most people, a pension annuity will be purchased between the ages 50 and 75. However the minimum retirement age will rise from 50 to 55 in 2010 and a few people in special circumstances may be able to avoid annuity purchase at age 75, but most people will purchase an Annuity aged between 50 and 75.

Age

The amount your pension fund will buy depends on your age, gender and state of health as these three factors affect how long you are expected to live. The older you are when you buy an annuity, the higher the amount you are likely to be quoted because the annuity provider (an insurance company) is unlikely to have to pay you for as many years as someone who starts taking their annuity income at a younger age.

State of health

Similarly, if you are suffering from a medical condition or illness which is likely to reduce your life expectancy, your annuity provider will pay you more because you are likely to survive fewer years than someone in good health of the same age. The same applies if you are a smoker or obese.

Gender

Women tend to live longer than men, so a woman is paid less than a man of the same age and with the same size pension fund.

Spouses’ and partners’ pensions

If you want your spouse or partner to have an income after you die, you will want to buy a ‘joint life’ annuity. This will reduce the amount you receive (compared to if you bought a ‘single life’ annuity), but will guarantee your partner or spouse an income for life after your death. Enter their age in the ‘partner’s age’ box.

You can choose what percentage of your annuity income you want your partner to receive – typically, 100%, 66% or 50%. The higher the amount you choose for your partner, the lower your initial income from the annuity rates will be.

To get the best annuity rates follow these top 5 tips:

1. Choose the best option. Shop around for the best annuity rates using the open market option and don’t just accept what your pension company offers.
2. Check if you qualify for enhanced rates, if you smoke, have poor health or take some medications then you may be entitled to enhanced annuity rates
3. Get good advice. It is important to talk to an independent financial adviser who specialises in annuities before you make your decision.
4. If you have a fund over £100,000 then consider Income Drawdown as well as the annuity option
5. Think about inflation. You can make your annuity ‘inflation-proof’ by having it icrease in line with price rises, although you’ll start off with a lower income than if you’d chosen a level rate.

Call us on freephone 0800 043 0725 to research the best annuity rates or visit our website http://www.annuitysupermarket.com

Value Protection addresses head-on the concerns of those who believe an annuity could represent poor value if they were to die relatively young.  It effectively creates a ‘win-win’ situation, because even if you don’t make it to age 75, you will at least be assured that either you or your dependants will have benefitted significantly from the pension fund accrued.

How Value Protection Works

A lump sum may become payable from your annuity in the event that you die before reaching age 75.

The maximum lump sum payable under Value Protection is the initial annuity purchase price, less the sum of the income paid from the annuity.  Any Value Protection lump sum payable will be taxed at source at a rate of 35%.

Please note that the Value Protection option must be selected when you purchase your annuity – it cannot be added later.

A dependant’s annuity may also be paid.  In this case, any Value Protection lump sum will be paid on the 2nd death, and will take into account the total amount of income paid to both the annuitant and the dependant.

The Value Protection options

Full Value Protection

Full Value Protection gives you the opportunity of providing a lump sum for your beneficiaries, if you die before reaching age 75, equal to the initial annuity purchase price, less the total amount of income paid.  If you die after reaching age 75, no lump sum will be payable.

Partial Value Protection

Partial Value Protection operates in a similar manner to full Value Protection.

However, instead of protecting the full value of the initial annuity purchase price, you may select to protect a proportion of it. In this case, the lump sum payable will be the proportion of the initial annuity purchase price protected, less the total amount of income paid.

Other options available:

Lump sum/Income Guarantee

This option operates in a similar manner to Value Protection.  However, if you die before age 75, but still within the selected guarantee period, the remaining payments due under the guarantee will be payable as a lump sum. If you die after age 75, no lump sum will become payable, but income will continue until the end of the guarantee period.  Please note that if you choose this option, you cannot have Value Protection as well.

Dependant’s annuity

Choosing a dependant’s annuity ensures that an income will continue to be paid to your dependant (s), should you die before them.

If a dependant’s annuity rate has been selected with Value Protection, a lump sum will only become payable on the 2nd death, and will take into account the aggregate income paid to both you and your dependant. The lump sum only becomes payable if you die before reaching age 75, although the age at which the dependant dies does not affect the eligibility for a lump sum payment.

Who would benefit from Value Protection?

This annuity option may benefit you if:

• You are concerned about losing out of your pension fund in the event of early death, particularly if you are in ill health
• You are more interested in lump sum death benefits than an income
• You want a guaranteed income stream and the reassurance of a lump sum death benefit if you die before age 75
• 35% tax on lump sum death benefits may represent an income tax or inheritance tax saving for your family

Get a quote

http://www.annuitysupermarket.com

The annuity market is very competitive and rates differ between annuity providers. You can substantially increase your pension income by purchasing your annuity from the company which pays the most income. This is called “exercising the Open Market Option.” It costs nothing to take advantage of this option and new rules introduced recently by the FSA mean that insurance companies must tell you about this option.