Getting Smoker's Annuity Rates

Throughout your life you accumulate a pension pot by contributing to a pension fund. Usually, your employer also contributes a certain amount to this fund and then when you retire, you use this money, along with any other savings you might want to contribute, to buy an annuity.

An annuity is the income you receive after you stop working so it is very important that you choose the right company and the annuity rates to suit you.

Research has shown that around 60% of people do not bother shopping around for annuity rates and instead just accept the first offer they are given, which could be stripping you of thousands of pounds in the log run. It is very important therefore that the open market  option is used to ensure that the best annuity rates are found to get the best value for your money.

One retiree in Manchester said, “I used an annuity rates calculator to find the best rates for me. It was quick and simple to use and I could log on to it on the internet which made it a lot easier. I also didn’t  realise that I qualified for smokers’ rates as I had been a smoker for over ten years. This meant I was entitled to higher or enhanced annuity rates because the pension company anticipated that my life expectancy would be shorter than the average healthy non smoker. I had to get a note from my GP to certify this and then submit it with my application, I didn’t even know that this was possible so I am glad that I did my research or I could have missed out on a lot of valuable income.”

Determining the right annuity is an individual decision that needs care and attention. If possible, speak to a financial or retirement advisor who will know the best deals on the market and will be able to point you in the right direction considering your age, medical history and location. Everyone’s quote will be different so it is important to remember that what worked for your friend might not work for you.