Getting the best annuity rates

According to research, 53% of people do not shop around for the best annuity rates on the market, and 35% simply accept the rate that their current pension provider offers them. Figures suggest that you can make 30% more profit on your pension by researching for a better annuity rate form other providers. Plans are currently being made in the Government to make this a legal requirement of buying an annuity.

Jean Wilson, from Fareham, commented, “Many people do not know the benefits of shopping around, known as the Open Market Option. This is very disheartening as people could make a lot more money in the long run if they just searched for better annuity rates. I was told about the Open Market Option which I wasn’t aware of at first. I found various quotes through shopping online. I used comparison websites and an annuity rates calculator to look at what the market was doing and what certain companies could offer me. The difference was huge compared to the original quote I was given. It means I can live that bit more comfortably knowing that I am backed by my finances. I don’t understand why people wouldn’t want to do this.”

The Open Market Option is so known because of the opportunity to scour the market at your own will, freely and without obligation. This allows the applicant to have the well-informed confidence to make an annuity decision rather than blindly accepting the first quote they are offered. According to a study, many people (up to around 30%) didn’t even realise it was an option to buy an annuity from another company, and simply thought that their current pension provider had to have their custom, despite their annuity rates being less competitive than others on the market.

Effort is being made via the media to communicate the importance of shopping around for an annuity rather than accepting what they are given.