£3,500 could be lost at retirement if you fail to find the UK best annuity rates for your individual circumstances, so make sure you shop around. It’s a sad fact that many retirees will miss out on valuable extra income by not looking at their open market options. Indeed, it is being suggested that the average retiree could miss out on £3,500 of income during the first five years they are in retirement by failing to shop around for the best deals, new research has found.
All this adds to a growing mass of evidence showing that retirees are not fully exercising their rights, or are not being properly advised, when buying pension annuities. Most people use the money saved in private pensions to buy an income for life, but many ignore the open market option, which allows them to improve their retirement income by moving their fund to take advantage of the best annuity rates on offer.
More than 60% of those retiring remained with their existing pension company to buy their income last year. However, analysis by mutual insurer MGM Advantage found there was a 20% difference between the best and the worst incomes payable by standard annuities. There are even bigger differences with enhanced annuities, which can be bought by those who are regular smokers, or who have a medical condition. They suggest that, on average these plans pay 22% more than average rates, and that this is an extra £715 a year for a man aged 65 with a pension fund worth £50,000.
So, when you come to look at annuity quotes make sure you check out all the deals available to you. It might be the case that you can really give your retirement income quite a boost, especially if you have some form of ill health. It is in your best interests to disclose as much information as you can.
