Soon it will be harder to find the best UK annuity rates with new postcode annuity entrants coming into the individual pension annuity arena. Aegon and Canada Life will both begin offering postcode annuities during the course of this month. Aegon has confirmed it will add postcode related pricing to its pension annuity range on 12 December. The functionality for postcode annuity rates was added to Aegon’s systems on 21 November for testing purposes, to iron out any flaws, and the product will go live very shortly. An Aegon spokesman stated that they will be officially launching these new annuity rates on 12 December, but they will not confirm the differential rates involved until they actually go live.
Canada Life has launched its postcode pricing already and estimates that their UK annuity rates will vary by around 7% based on postcodes alone. These two major insurance companies join Aviva (was Norwich Union), Legal & General and Prudential in offering UK annuity rates based on place of residence (or postcode). Whilst these rates can make a difference to your retirement income depending on where you might live, you shouldn’t forget about enhanced annuity rates or smoker annuity rates, which could increase your retirement income by a lot more than the 7% figure mentioned.