With many of us now living well into our 80′s, are standard annuity rates or enhanced annuity rates the best way to maximise your income from your pension. Many pension providers fail to highlight what your options actually are, which means many people end up making a decision that can have adverse effects on their financial well-being. You can buy a single life or joint life annuity, one that remains level throughout or increases with inflation, or in some cases an enhanced annuity, depending on your circumstances. However, once you’ve bought an annuity, you can’t change your mind.
You don’t have to buy an annuity from your current pension provider. Take advantage of the open-market option; compare annuity rates from other providers to see if you can get a better deal. Enhanced annuity rates could be available if you have a shorter life expectancy, and these are based on a number of factors: where you live, whether you’re a smoker, if you have any existing medical conditions, or if you’re obese. Approximately 40% of retirees could qualify for enhanced annuity rates, which would see them receive an average additional income of around 22%.
