Getting the best possible retirement annuity is essential if you are to maximise your income in retirement. An annuity is like any other other financial product in that you can only be sure of getting the best deal if you shop around between providers. Whilst we brits are adept at comparing prices for car insurance, mortgages, loans, credit cards etc we are woefully inadequate at comparing offers for retirement annuities. However, this is not down to pure apathy on the part of annuitants, it is down to a huge amount of misapprehension over what an annuity is and the whole question of the open market option (OMO).
Most people, quite understandably, do not burden themselves with educating themselves about annuities until they are approaching retirement. When they reach this time, most will understand the concept of the annuity, but still may not be aware that there are other potential options aside from using their incumbent pension provider. This is where the potentially costly mistake is made by many – 61% in fact. Many assume that because they have built up a pension fund with one particular insurer over a number of years, then logically that company will have to provide them with an annuity income. Some may even think that their retirement annuity will commence automatically when they retire. This is not the case. To get the best retirement annuity you must compare offers from other providers. Because this is not made unequivocally and abundantly clear by providers, many annuitants stick with the first offer made by their provider and therefore miss out on thousands of pounds worth of retirement income.
Although there have been improvements to the information given to potential annuitants, including an improvement to their retirement wake-up packs, sadly the majority of people still do not compare retirement annuities. To make sure you’re NOT one of those who could be missing out, ensure you speak to an annuity specialists or IFA about your annuity options.
