You are approaching retirement, have a pension fund, and you have decided that following annuity advice and reviewing all the options available is the way forward.
You are also aware that you can take exercise your Open Market Option to find out who in the market will provide you with the best rate annuity, in other words which company will give you the highest income for your fund. But there is one further consideration.
In the United Kingdom one in three of us may be eligible for a higher income when we retire due to poor health or lifestyle. You may be eligible for an Enhanced Rate annuity, which may mean your pension fund could purchase a higher income in retirement.
The additional income is judged on your lifestyle. For instance, if you are a smoker or over weight you are more likely to suffer from all the health issues associated with that. Being blunt, the companies that supply annuities will take the view that you are less likely to live to a ripe old age in retirement, so they can afford to give you a better income from your pension fund, hence the term ‘Enhanced Rate annuity’.
Applying for an enhanced rate annuity involves the completion of one simple quote request form that all the companies who provide enhanced annuity rates accept. It’s important that you disclose all the relevant medical information, because it may affect your retirement income levels if you withhold lifestyle information and mistakes cannot be corrected later. It may also entail a medical report from your doctor.
Even if you are unsure about your eligibility for an enhanced rate annuity it may still be worth completing the form to find out. Remember this annuity will provide you with an income for the rest of your life so the decisions you make now are important.
Even if you are in good health but considering a joint income with your partner, their lifestyle is also a factor that could influence the rate you are offered.
Once a set of quotations are produced you should compare that with the annuity quote provided by your pension company then simply decide which option is best for you .
With enhanced rate annuity’s seeking independent advice is essential to ensure you get the best possible income available tailored to yourselves and your partner’s lifestyle in retirement. If you have sought advice and your adviser has not discussed enhanced rate annuities, you have not been told of all your options. Remember this is a specialist area and only a select number of annuity companies offer them. We are in times of severe austerity so making sure you get as much income from your pension fund could make a lot of difference to your retirement and what you are able to do during it.
