Will you still have to buy a pension annuity when you reach retirement? The crucial question is, how much pension will be deemed sufficient to prevent the individual retiree from falling back on State benefits and how big a lump sum will they need to actually provide this? Until we know and understand all this fully we won’t really know who still has to buy a pension annuity for their all important retirement income. Millions of individuals do not have a complete National Insurance record and not nearly everyone earned enough to qualify for earnings related pensions, so it’s difficult to really put a framework round this.

It is likely that under the new rules, all these individuals will be obliged to use their pension savings first to purchase a pension annuity in order that they do not qualify for any particular State benefits before they are eligible to withdraw money from their hard earned pension fund. Roughly speaking a couple will need to have an income in retirement of somewhere around £10,500 a year, roughly the level at which they are no longer eligible for Pension Credit, before the new rules will be allow them to take any money from their pension fund. What is likely, however, is that these changes will largely benefit wealthier individuals. These changes might therefore be a positive step forward, but only for a select few individuals.

Despite what you may have read, many people will still have to rely on the best UK annuity rates. While the government’s plans to abolish the requirement to use pension fund savings to purchase an annuity by age 75 at the latest is welcome news, the reality is that for the vast majority of retirees, nothing much will change. The new rules will require everyone to ensure that they have a minimum income in retirement which is sufficient to prevent them from becoming a burden on the State. Some 90% of annuities are purchased with pension funds of £50,000 or less, which would just about provide sufficient retirement income to prevent the individual from qualifying for State benefits.

Most people will therefore still be forced to purchase an annuity, hopfuly with high UK annuity rates. Those who will benefit from the changes are the wealthy who will be obliged to provide this minimum pension, but will be free to do what they like with the balance of their pension fund. The new rules will give pension savers the choice of having ‘capped drawdown’, which allows people to choose how much money to take annually from their pension fund throughout their retirement, or whether to draw any income at all. This is pretty much as income drawdown operates today. The alternative will allow people to take more than this ‘capped’ limit or even withdraw all the fund in cash, provided this will leave them with sufficient pension income that they will not themselves become a burden on the State. Savers will also have the option of leaving any unused pension fund monies to their children or other beneficiaries, albeit with a tax charge expected to be a hefty 55%.

I’ve just seen an article on TV about annuities. It said you should use the open market option for the best annuity rates for your retirement income. Annuities quotes from the open market will include all the different annuity providers and not just a single provider or a panel of providers. It will also include specialist providers who excel in the area of ill health. To use the open market option and get you annuity quotes is very simple. We recommend that you use a specialist annuity desk such as this that transacts this type of business each and every day and will be able to guide you all the way through the process.

What exactly is the annuity quote process? It starts with asking questions about the shape of annuity you require for your circumstances. The shape is the options that you might want built into your annuity. There are several: a continuing pension for your spouse or civil partner, a guarantee payment period, escalation in payment to protect against ongoing inflation, and value protection which pays out any unpaid pension fund monies on death before age 75. but there is a tax charge of 35%. Once you have chosen the shape then annuity quotes can be prepared to match using the open market option. It should be pointed out that each of the options chosen will actually reduce the amount of income from a standard single life annuity that doesn’t have any options.

To get the best annuity rates you need to understand UK pension annuity rates are all about life expectancy. When you buy an annuity with your hard saved pension fund, you’re actually buying a guaranteed income for the rest of your life. So it’s important you shop around to find the best deal and understand why. Annuity rates are based on various factors, and this can lead to to you receiving a substantially higher retirement income. However, to find the best deal you really need to compare annuity quotes from different companies. It’s possible you could get up to 30% more retirement income than you would receive from your current pension provider. So, don’t simply waive goodbye to thousands of pounds of vital retirement income, enquire now to see how much extra income we can find for you.

UK annuity rates are based on various factors: your age, gender, size of pension fund, occupation, your health, if you’re overweight, if you smoke regularly, your alcohol consumption, and where you live. The more factors that apply to you, the higher your retirement income. To achieve the best deal at retirement you need to be prepared to disclose any details about your state of health or your lifestyle that might effect the annuity rates you’re offered. The more you disclose, the higher your retirement. Why is this? Because annuity rates are all about life expectancy. If your particular circumstances suggest a lower than average life expectancy, you’ll get a higher income, because the annuity provider will anticipate paying you that income for a shorter period of time.

A lot has been said about pension annuities; is a flexible pension annuity the answer to many people’s concerns. According to enhanced annuity rates provider, MGM Advantage, around 40% of non-retired adults believe that the amount of annuity income they will require as they progress through their retirement will increase. This rises to nearly half of non retired adults aged 55 to 64 years. Just over 22% expects their retirement income requirements to remain the same throughout, while 23% expect them to somehow decrease throughout retirement. Finding suitably flexible annuity products that can meet these changing needs in retirement becomes even more important.

Aston Goodey, of MGM Advantage comments that while it is encouraging that more people are aware of the impact that inflation will have on their annuity income, it is a particular concern that so many have no intention of seeking professional advice. Many people still have unrealistic expectations of the retirement lifestyle they would like to expect and afford. The reality could be very different, particularly if people take the pension annuity income offered by their existing pension provider rather than shopping around for the best annuity rates using the open market option.

He added that another way that people can enhance the level of annuity income they receive in retirement is to select a that maintains exposure to the stock markets. While it does involve some risk, a retirement product like this also has a better chance of generating upside returns, negating the impact of ongoing inflation. MGM Advantage believes that a growing number of retirees will need to keep more of their assets exposed to the stockmarkets, and that this will fuel strong growth for the asset backed pension annuities.