What is the ‘Best Annuity Rate’

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One of the most important financial decisions you will make in your lifetime is when and whom, to draw your accumulated pension from.

This is called an annuity. If you are aged between 55 and 77, you can elect to take an annuity any time during these years.

You are able to start receiving pension income from the age 55 onwards.

When you decide to draw your pension/annuity you will have two main choices:

Draw your pension from the existing provider, or,
Go to the market and choose the most competitive annuity for your circumstances.

By going for option 2, you are never going to end up with a lower pension, because if the market cannot offer a greater income, you opt to receive your pension from your existing provider.

Therefore it is good financial sense to review the market (and activate your ‘Open Market Option’) in order to achieve the ‘Best Annuity Rate’.

It can be even more important to do so if you are a smoker, have any existing or previous health conditions as you may be entitled to an enhancement on your pension. You may not get this taken into consideration with your existing provider.

In drawing your pension there are several other important decisions you will need to make. Do you require a single or joint pension? A level or increasing pension? Would you like it to be guaranteed? All of these things can add up to produce a confusing situation at a very important stage of your financial life.

This is why at ‘The Money Map’ we will simplify the annuities process for you, explaining in plain English and ensuring you receive the highest income for your pension fund that suits your requirements.

The Process

Call The Money Map: 0800 8488250, arrange a free financial review or contact us via our online form.
First of all we will discuss with you relevant annuity options and help you decide which suit your personal circumstances the best.
We will then research the annuity market to achieve the highest pension/income available for you.
Compare this to the annuity quote from your existing provider.
Help you complete any paperwork required to start receiving your income whether from your existing or new provider.

At The Money Map we are totally independent and we pride ourselves on high service standards and client satisfaction, as part of this service we do not charge any fee for the initial research and ‘open market option’ quotations on your pension/pensions.

As part of our process we will provide you will copies of our research and a report explaining our recommendation and how much financially you would receive extra per month/year by choosing the highest annuity rate for your situation.

Therefore you can have the knowledge of the ‘Best Annuity Rate’ for your pension at no cost to yourself with no obligation.

What is an annuity?

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You can convert your pension savings into a regular income, which will be paid for the rest of your life.

This is called an annuity. If you are aged between 55 and 77, you can elect to take an annuity any time during these years.

There are a number of options for you to consider when choosing an annuity, each of which can affect the level of income that you will receive in retirement.

One of the most important aspects is being able to draw up to 25% of your pension savings immediately as tax free cash. The remainder can be used to buy an annuity, proving a regular income at intervals that you determine.

Annuities come in two main types of annuity. A conventional lifetime annuity is the most popular choice as it guarantees you a secure income for life. The amount you receive can be fixed or can increase over time. You will have to decide at the outset what you would like to do to enable you to budget your lifestyle.

The other option is an investment annuity which is linked to the stock market. As with all stock market investments, there comes an element of risk and your income is less secure. You do however have more flexibility. Should this particular area interest you then I would strongly urge you to discuss this with one of our annuity specialists.

Types of pension schemes that you are able to convert to an annuity:

Stakeholder pension
Group personal pension
A defined contribution pension with your employer
A free standing additional voluntary contribution scheme
Retirement annuity contract
A Personal pension

With all of these contracts its best to speak to a specialist adviser to ensure that you are making the best and most suitable choice for your circumstances. The main reason for this is because once you have made your choice dependant on what you choose it can not be amended.

Why choose Income Drawdown?

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Unlike an annuity, with Income Drawdown your money remains invested and you simply take a pension income directly from it.

This is the most flexible way to take your pension benefits, although it may not be suitable if you want the security of income that an annuity offers.

This option might suit you if you want:

To carry on paying in to your pension – if you’re under 77, you can still add to your pension pot and get tax relief
Growth potential – as your pension pot stays actively invested in a tax efficient environment, there is potential for future growth
A flexible pension income – you can take payments to suit you if you have a pension pot that’s large enough to sustain your withdrawals from it
More control – you can buy an annuity at any time
Flexible options on death – unlike some annuities, this pension can give flexible benefit options after your death

How much income will you get?

Income drawdown allows you to take a flexible income directly from your invested pot, within limits set by HM Revenue & Customs. Aside from these limits, the income you’ll get depends on a number of factors. The most important ones are:

The amount of money you have available in your pot to take an income from
How often you draw an income and the amount you take from your pot. The more you take, the less you will have for future years.
How your investments perform. For example, a lower than expected performance can reduce the amount of income you can take in future.

Income Drawdown v Annuity

An annuity is a lifetime contract and cannot be changed once started. For example if annuity rates increase you cannot get a better deal. If you are close to the age 70 or more then annuity rates are likely to be favourable for most people. However a person in their mid 50’s or early 60’s may not benefit from a contract that cannot be changed for the rest of their lives.

However if you have a small pension pot and no other means to support yourself an annuity is likely to be most suitable.

Income drawdown offers younger clients in particular more options in retirement and the chance to see their money grow even after they have retired. As long as you understand the risk versus the reward and have a large enough pension plan (£50,000 typically) to absorb costs etc then these are a viable option.