We currently have official and unofficial inflation at a high point, effecting the elderly most. Therefore at retirement it is important you speak to a specialist annuity adviser. They can guide you through all of your options and search the whole market for the best annuity rates.

Many clients face the same concerns about inflation, knowing that there are no more bonuses, no more overtime payments and no more promotions. In respect of an annuity in the open market, by shopping around amongst annuity providers, a better conventional annuity rate can be found, but it is also the shape of the annuity that matters.

The most commonly known types of annuities are conventional annuities, inflation-linked annuities and with-profit annuities. Inflation-linked annuities are designed to change each year in line with inflation, but they pay less at the outset than a conventional annuity.

There is also a with-profits annuity. A with-profits annuity in turbulent market conditions has an income stream that is less susceptible to dramatic fluctuations in value. With a with-profits annuity your income will not fall below the minimum guaranteed level set at the outset, but future investment returns do present a degree of risk, as they are not guaranteed.

You really do need to understand the options when you come to buy your pension annuity.

The purpose behind an online annuity quotation website such as this is to give you a guide as to the type of annuity you might select and the options to go with it. It isn’t complicated if you seek advice but there are a variety of annuity choices and therefore annuity rates at your disposal:
Single-level annuity
Guaranteed annuity
Inflation-linked annuity
Escalating annuity
Joint-life or last-survivor annuities
Investment-linked annuities
Enhanced annuity
With-profits annuity
Short-term annuity
Value-protected annuities, and more……

For more information please take a good look through the website and try out some comparison quotations. Whatever you do, make the right choice. It is too important a financial decision to get wrong!

It is not often we are given guarantees; but we are with pension annuities. Whatever type of variation of a straightforward pension annuity, you get a guaranteed annuity rate. You know exactly where you stand, whether it’s a conventional annuity, an impaired life annuity, an enhanced annuity, a single life annuity, or a joint life annuity with spouse’s benefits. You get the idea.

However, take a with profits annuity, an income drawdown contract, or one of the new variable annuities where you have to rely on investment performance, then there has to be a big question mark with the current market volatility. You have to rely too much on the investment element of the contract for the whole thing to work to your advantage.

So go on, treat yourself to a guaranteed annuity rate. Rates are pretty good at the moment.

There are a few annuity companies with competitive annuity rates. Legal and General annuity rates are good. Norwich Union annuities and Aegon Scottish Equitable annuities are good, especially for conventional annuity rates. LV=, MGM Advantage, Just Retirement, and Partnership have good annuity rates for enhanced annuities and impaired life annuities. Prudential and Friends Provident often come out well. Norwich Union, Prudential, and Legal and General are offering postcode annuity rates. Some even offer with profit annuities.

All a bit of a minefield. Read through this annuity website for full information.   

Here we highlight your choice of annuities: First, you have single-level annuities. These are the simplest type of annuity. They pay out exactly the same amount to an individual (the “annuitant”) every month until the annuitant dies.

Guaranteed annuities pay out an annuity payment each month for at least the length of the guarantee period, even if the annuitant dies before the end of the guarantee period; in which case the guaranteed annuity payments are made into the annuitant’s estate. The maximum guarantee is ten years.

Inflation-linked annuities increase the annual payments by the rate of increase in the Retail Prices Index (RPI) to give payments protection against inflation.

Escalating annuities increase by say 3 or 5 per cent to give the pensioner some protection against inflation and to allow for possible increased income needs as the annuitant ages.

Joint-life or last-survivor annuities pay an agreed annuity payment to an annuitant and the annuitant’s partner while both are alive. Following the death of the annuitant the contract pays either the same amount or an agreed reduced amount each month until the partner dies. The reduction in last-survivor
annuities is typically a half to one third.

Investment-linked annuities involve the fund backing the annuity being invested in an equity product. The annuitant receives an annuity payment that is related to the performance of the equity market.

Impaired-life annuities pay an increased annuity payment if the annuitant has health problems, such as cancer, chronic asthma, diabetes, heart attack, high blood pressure, kidney failure, multiple sclerosis or stroke.

Enhanced annuities pay a higher annuity payment related to actuarial considerations.

Phased-retirement or staggered-vesting annuities mean that instead of converting the whole pension fund, withdrawals are scheduled over several years. This is achieved by splitting the fund into many separate segments.

With-profits annuities link income directly to the performance of the insurance company’s with profits fund. Typically, income is made up of two parts: a minimum starting income and bonuses.

Short-term annuities allow an individual before 75 to use part of a pension fund to buy a fixed-term annuity lasting up to five years. They can choose annuity options in much the same way as basic annuities.

Value-protected annuities will pay a lump sum on the death of the annuitant, equivalent to the difference between the original purchase price and total payments made. The lump sum is taxed at 35 per cent. They are only available until aged 75.