What is an annuity, anyway?
An annuity is a type of insurance policy you can buy to convert your pension savings into a regular income for your retirement. The bigger your pension pot is, the higher your income is likely to be.
That doesn’t sound very complicated...
It might seem simple, but there’s a lot more to it than that. Annuities are sold by insurance companies, and they take into account a lot of different factors before deciding how much money to offer you.
Your age, health, lifestyle factors (such as your weight and whether or not you smoke) and even the state of the economy can all affect your quote.
If I’m not happy with my annuity rate, can I change to a different policy?
You can’t change your provider or the terms of your agreement once you’ve purchased a policy. The Government is set to introduce a “secondhand annuity marketplace” from April 2017 (where you’ll be able to sell an unwanted annuity for a lump sum). But we don’t know exactly how this will work yet, and it’s likely it’ll be difficult to sell your annuity for as much as you paid for it.
Is buying an annuity my only option?
Not anymore. In 2015, the rules were changed . So you no longer have to buy an annuity with your pension savings.
Annuities are still popular because they’re the only way to guarantee a regular income for the whole of your retirement. But other options such as income drawdown and phased retirement are now available too.
Once you’ve got your annuity quotes from us, you might want to look into your other options, or discuss how you could combine an annuity with another retirement produce to really make the most of your pension savings. The specialists we work with will be able to provide you with personally tailored advice, and give you an overview of all your options. So you can make an informed decision that works for you.