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Why Shop Around For Annuity Rates?

By Anne Newton

Your pension provider will probably get in touch as you near retirement age. They’ll want to let you know how much your pension fund will mean that you can earn each month through their annuities.

Fairly recently, however, the FSA in the UK made is compulsory for your pension provider to also tell you about the Open Market Option. What this essentially is, is your right to shop around and see if you can find more favourable rates than those being offered by your pension provider. Not everyone knows they can do this, but the question is, why bother?

Well, think about it. For many of retirement age, an annuity makes up the majority of their monthly income. The amount you receive each month will therefore have a massive impact on your standard of living. Rates can vary massively from provider to provider and you want to make sure you’re getting the most out of yours!

It is particularly important to shop around if you think you might qualify for Enhanced Rates. Basically, an Enhanced Rate Annuity is designed for those whose lifestyle or health may mean they have a shorter life expectancy, but who condition does not impair their quality of living. For example, smokers who have smoked more than ten cigarettes a day for a decade or more could qualify, as could those who must take regular prescription medication or who have been hospitalised with an illness previously. Enhanced Rates are higher than standard rate annuities and shopping around could earn you even more each month.

Consider this. Your pension provider is only providing you with a quote for their own annuities. They are one of countless providers available, so there’s a good chance that theirs is not the best rate around. Who wants to spend all those years working and then retire into years of worrying about your income? At least shopping around will ensure you get the best you can from your pension fund.

Learn how to shop around quickly online for the best annuity rates.

Article kindly provided by UberArticles.com

Topics: Personal Finance | Comments Off

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Article Citation
MLA Style Citation:
Newton, Anne "Why Shop Around For Annuity Rates?." Why Shop Around For Annuity Rates?. 1 Jul. 2010. uberarticles.com. 12 Dec 2014 <http://uberarticles.com/finance/personal-finance/why-shop-around-for-annuity-rates/>.

APA Style Citation:
Newton, A (2010, July 1). Why Shop Around For Annuity Rates?. Retrieved December 12, 2014, from http://uberarticles.com/finance/personal-finance/why-shop-around-for-annuity-rates/

Chicago Style Citation:
Newton, Anne "Why Shop Around For Annuity Rates?" uberarticles.com. http://uberarticles.com/finance/personal-finance/why-shop-around-for-annuity-rates/


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