Use your Options when buying an annuity
We all know that we will have a lower income when we retire, but it is important that you make the most of the money you have saved up when you buy an annuity.
Hopefully you will have made a good choice in financial planning for retirement, for which you have probably relied on a financial adviser.
An Annuity is what you get in return for your savings. The reason it is called an annuity is that it is an annual payment – but you get it monthly or quarterly. You ‘buy’ this from a life insurance company.
The fact is that you need to exercise your retirement income options when it comes to getting an annuity, and there are various ways to go. Ensure that these are explained to you by either your life assurance company.
You will find it is easier than you think to get a good deal in your annuity. This is because, following changes in the law in the UK you are not obliged to obtain your annuity from the life company where you have been saving for a pension. In fact, they should tell you that you can buy an annuity where you like. Some companies do not offer annuities.
What is the best way to find the best annuity for you? These annuity payments vary according your situation, such as how old you are when you take your annuity, etc. Also, you can choose to take a level payment that remains the same however long you live, or one that increases with age. The benefit that increases with age sounds a good idea, but is often not the best bet.
Try searching the web to get an idea of the situation. The best bet is probably to consult a broker that specialises in finding the best annuity for clients. You will pay them quite a small fee for their services.
The broker will search for the annuity that suits you best, and then should give you a short list of suitable firms. It is up to you to choose.
This article is not offering financial advice. Consult an independent financial adviser before you make a decision.
This entry was posted on Thursday, April 23rd, 2009 at 6:02 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.