Annuity rates fall: the importance of shopping around

Financial analysts have warned us that new levels of income after retirement have decreased for the third year in a row.

For example, someone retiring this year would receive £607 every year instead of £624 which would have been offered to him this time last year.
People who are able to get enhanced annuity rates, such as smokers or people with impaired medical history, are not having as much trouble as these annuity rates only fell by 2.1% for a man and 1.4% for a woman.

Financial advisors are suggesting that the importance of using the Open Market Option, or simply shopping around, is more important now than ever before. Shopping around for the best annuity could make retirees earn 30% more than if they just accept the first quote they are offered.

Usually, this quote comes from their existing pension provider. Common conception is that it is “easier” to accept the quote rather than do any research into what else they could be offered.

Jack Driver, from Liverpool, commented, “I have just retired and it is worrying to think how you’ll cope with the economy doing as it is. Annuity rates are falling and the security of our savings always seems to be in question. I decided not to accept the first quote I was given, because I wanted to see how much better I could get it if I just tried to find something myself. I used an annuity calculator found much better rates on the market, and after talking with a few companies, there was a keen competition going on between providers to undercut the other’s quote. I ended up getting such a good deal, which, in these financially difficult times, has given me more reassurance that I will be able to cope through my retirement.”