How to Find and Compare the Best Annuity Rates

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by: BSM
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Date: Sat, 29 Jan 2011 Time: 11:39 PM
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How to Find and Compare the Best Annuity Rates

Annuities are a secure and safe way to invest your pension. They turn the lump sum of your pension pot into an income for life that will see you through to your old age once

you have retired. Annuities are provided by insurance companies and there are lots of different deals and offers available on the market.

Find and Compare Annuities

You will need to spend some time shopping around and finding out the best rates offered for annuities. This is a key way in which you can maximize your money and make sure you get a good income from your investment. Because annuities are offered on the open market you are not tied to any specific company (such as the provider of your pension or their affiliates). This means you will be free to invest in whichever annuity you feel would best suit your budget and requirements. There can be a lot of difference between the various rates on the open market and you could boost your income by as much as 25% upon retirement by choosing well. This is why it is a good idea to get help from a professional independent financial advisor. They will be able to provide lots of information about annuities and which products can best suit your pension pot and retirement goals. Make sure you request annuity quotes on the same basis otherwise you will not be able to compare them effectively.

Buying Annuities

Shortly before you reach your retirement date your pension provider will issue you with an annuity quote based on the value of your fund (or funds if you have more than one pension scheme). You can then start looking around for annuities and get some formal quotes based on the details provided by your pension company. Compare the annuity rates in these quotes carefully and make sure they can meet your expectations of what your target income will be once you have retired. This is a good point to get help from an independent advisor to make sure your calculations and comparisons are accurate.

Once you have decided which annuity quote best suits your requirements then you can contact the provider for an application form. This will not commit you to taking out the annuity so you can still back out right up until you have actually signed the form and set it back.

When you receive the application form you will need to make sure you provide all the information they have requested on the form to avoid any delays in processing. Then you can sign and return the form and just sit back and wait to hear from the provider. They will write to you and confirm the details of the transaction and what date your annuity is due to start. This should not take longer than three weeks if you have provided all of the information and filled in the forms correctly.

About the Author

John Hughes has been writing for on financial matters for around 6 years and specifically writing about annuities for the last 3 years.