IMPORTANT: MAKE SURE YOU SHOP AROUND FOR THE BIGGEST ANNUITY INCOME
It is vital to shop around at retirement for the best pension income – or annuity. This is also known as taking an Open Market Option (OMO) and by finding the right annuity provider an OMO could mean up to 40% more income each year, for life.
WHY SHOP AROUND?
Your current pension provider rarely offers you the highest retirement income. Although they make it very easy to accept their offer and for you to get on with your retirement, it could cost you dearly.
You risk being locked into a poor deal for the rest of your life. Just like your car insurance, it pays to check you are getting value for money.
In fact it is so much more important because unlike car insurance, this decision is for life and you only have this one chance to get it right.
UNDERSTAND THE FEATURES YOUR EXISTING PLANS MAY HAVE.
Some older pension policies may have guaranteed annuity rates built into them, which could give you a higher income than the current market rates.
CHOOSE THE ANNUITY FEATURES TO SUIT YOUR CIRCUMSTANCES…
Those who shop around are – quite rightly – usually looking for a higher income. However, you could add on a pension income for your spouse or partner.
You could choose to build in a yearly increase in income at a percentage, say 3% or 5% or to match RPI inflation.
You could build in a 5 or 10 year guarantee which means payments or the equivalent lump sum would be paid for the remainder of the guarantee period if you died early.
Remember to fill in a medical questionairre to see if you qualify for an enhanced annuity.
You can structure your income payments monthly, quarterly or annually to suit your needs.
The top annuity provider can change frequently and will vary depending on your circumstances and the kind of annuity you choose.
It makes sense to get the most up to date comparison to ensure your pension savings are producing the best retirement income possible.
Take advice from a Competent Chartered Financial Planner or contact an Annuity Specialist.