An interesting fact; UK pension annuity rates higher for men than women. Naturally this is because women tend to live longer than men. On one hand this means that a female retiree will on average enjoy her retirement income for longer than men. However it also means that she will get lower annuity rates. Annuity rates determine what income you get for the hard earned pension fund you’ve built. Insurance companies (the annuity providers) offer lower rates to women because they know, statistically, the income will have to be paid for longer.
However by shopping around you can often obtain far better UK annuity rates than the one offered by your existing pension provider. So much so that a woman who shops around for a pension annuity can achieve a significantly higher retirement income than a man who doesn’t bother. By shopping around for the best annuity rates a 65 year old woman could currently get an annual income of around £6,305 from a £100,000 pension fund. Scottish Widows and Friends Provident are just two of the larger pension providers who would currently all offer a 65 year old male retiree a lower income than this, in one case as low as just £5,796 a year.
There are undoubtedly many other insurance companies who offer such uncompetitive pension annuity rates, these three just happen to publish their rates on the FSA website. These 65 year old men would compare even less well with men of the same age who shopped around for their annuity purchase, who could thereby expect about £6,710 a year from a £100,000 pension fund. This demonstrates the importance of shopping around for your annuity.
