Compare The Best Annuity Rates From Annuities Advice

 

Throughout your working life you will more than likely have been paying into a pension on a regular basis to accumulate a cash lump sum, along with capital gain from the investment. When you finish working and start your retirement, this fund is used to purchase an annuity. The purpose of an annuity is to provide an income, usually for life, in exchange for a lump sum, usually that from your pension.

 

Seeing as the rate of return on the annuity will dictate the income you receive in retirement, it is obviously a crucial decision and extremely important that you get the highest annuity rates possible for the maximum income in retirement.

 

 

Types Of Annuity Rates

 

Fixed Term Annuities Vs Life Annuities

For the majority, the main concern would be the life annuity rates. This is because life annuities guarantee to pay the income for the rest of your life. This gives you the piece of mind that you have a continuing income throughout your retirement and once the annuity is purchased, there is no going back. This also means you no longer need to be involved with your annuity and can enjoy your retirement knowing your income is secure.

 

Fixed term annuities on the other hand only pay an income for an agreed term. Fixed term annuities will need to be reviewed at the end of the term and alternative arrangements made. This can provide flexibility but also an uncertain income as market conditions at the time will dictate the rate that it pays each time it is reviewed.

 

Fixed Annuities Vs Variable Annuities & The Escalating Option

 

As the name suggests, fixed annuities pay the income at the same rate for the whole term of the annuity. It is important to mention that the actual income may not be fixed throughout the annuity. This is because you can often choose a fixed rate annuity that increases by a certain percentage at certain periods throughout the term.

 

The reason why you may want to look at this option is so that your income rises over time to try to keep pace with inflation. This will usually mean a lower initial income though compared to a level annuity that just pays the same income throughout. Fixed rate annuities are easy to understand and calculate with a known income.

 

Variable annuities can be seen as more flexible and also more volatile as they are investment (unit) linked. Generally speaking, variable annuities guarantee a certain level of income with the potential for higher income depending on investment performance. The greater the guarantee usually means the higher the cost or the lower the rate meaning the lower the initial income you receive.

 

 

Call Us On 08000 936399 Or Use The Quick Quote Form On The Right To Source The Best Annuity Rates

 

 

 

Immediate Annuities Vs Deferred Annuities

 

With an immediate annuity, you receive the income as soon as you make the lump sum investment whereas with the deferred annuity there is a delay between you making the lump sum investment and the annuity provider paying the income. The main reason why someone would want to defer the annuity is because it may provide you with a higher retirement income as you are effectively leaving the funds invested before drawing the income.

 

Guaranteed & Joint Annuities

 

A guaranteed annuity will be paid for a set number of years regardless of early death. In the event of early death within the guaranteed period, the income will be paid to the beneficiaries for the remainder of the guaranteed period.

 

With a joint annuity the income will be paid until the death of the second person. This means that you know that the surviving spouse is taken care of should the worst happen to you.

 

 

How Are Annuity Rates Calculated

 

Annuity rates are calculated using several factors that are used to estimate how long the annuity provider expects to have to pay the income. In other words, how long you are expected to live. The longer you are expected to survive, the longer the annuity provider will have to pay an income so the lower the rate.

 

Some of these factors include your age, sex, any health concerns, whether you smoke, where you live, your previous occupation and the size of your pension fund. Generally, women live longer than men and therefore their annuity rates are reduced. Your age is also a factor because the later you start your annuity the higher the level of income. If you smoke or have health issues, even things such as asthma or diabetes, then you may be eligible for enhanced annuity rates.

 

 

How To Compare Annuity Rates

 

The open market option enables you to shop around for your annuity rates and this is exactly what you should do. The rate offered by your pension provider is often not the highest annuity rate available to you. With the development of the internet, it is now relatively easy to compare the market. For a quick overview try the annuity rates calculator or use the quick quote form to the right of the screen or for a more in depth quotation tailored to your individual circumstances use the full quote form.

 

 

Always Speak To A Professional Adviser

 

You should always speak to a professionally qualified adviser about your financial planning decisions. A good, experienced adviser knows the market and will be aware of companies and products that you would probably not find when doing your own research. They can also talk to you in depth about your individual circumstances before mathcing you to the annuity that is right for you and fits with all your future plans.

 

Contact us today on 08000 936399 to speak to one of our experienced annuities advisers to find the best annuity rates that are right for you.