subject: Finding More Favourable Annuity Rates [print this page] If you are about to retire and swap the pension fund you've been working so hard to pay into for an annuity that will make up the bulk of your retirement income for the rest of your life, your pension provider has probably already been in touch! They've probably explained what their rates are and how much you could get each month for the rest of your life in exchange for your pension fund.
Fairly recently, however, the FSA in the UK made is compulsory for your pension provider to also tell you about the Open Market Option. What this essentially is, is your right to shop around and see if you can find more favourable rates than those being offered by your pension provider. Not everyone knows they can do this, but the question is, why bother?
Well, think about it. For many of retirement age, an annuity makes up the majority of their monthly income. The amount you receive each month will therefore have a massive impact on your standard of living. Rates can vary massively from provider to provider and you want to make sure you're getting the most out of yours!
In addition to that, you might be someone who could qualify for the Enhanced Rate Annuities on the market. Essentially, Enhanced Rate Annuities are for those who have illnesses or lifestyle habits that may not affect their day to day quality of life, but that could potentially mean they may not live as long as others. Examples include those who have smoked 10 cigarettes or more for the past 10 years or more, those who are significantly overweight or people who have previously been hospitalised for a medical condition.
Because of the massive variety of rates on the market, there is a good chance that the rate you are being offered by your pension provider isn't the best you can get and therefore shopping around is absolutely critical. When you've spent your whole life working, you want a good, happy retirement without the stress of worrying about income!
