Annuities – they’re confusing territory for many. Perhaps that’s why so many retirees-to-be are not taking advantage of their right to shop around.
In fact, 60% of retirees, amounting to around 270,000 people each year, just take the first offer given to them by their pension provider. You might not think that’s such a big deal, but there’s a surprising difference between the lowest and highest rates on the market and your personal circumstances could drastically affect the size of annuity you are entitled to.
Kevin Stelfox, of annuityrates.co.uk, highlights the importance of shopping around:
“It could cost you anything up to £1000 per year by NOT shopping around. The Open Market Option is there now. That’s your right to shop around. With so many different types of annuity and fluctuations in rates, the chances that you pension provider’s offer is the best one for fund size and personal circumstances are slim.”
Shopping around is now also easier than ever before thanks to Independent Financial Advice websites like annuityrates.co.uk that will do the leg work for you.
Failing to shop around also means that many retirees who could qualify for enhanced annuities are also missing out. It’s thought that 40% of retirees could qualify for the enhanced annuities. If you:-
- Have been smoking for ten years or more.
- Have an unhealthy BMI
- Have a pre-existing medical condition
You could qualify for even higher annuity rates.
Retirement is a massive lifestyle change. Aside from the fact that you will no longer be working, which in itself takes a lot of adjusting to, your finances will be completely restructured in many cases. Shopping around for the best annuity rates is just one way to take some of the hassle out later on.
