This is the question many potential annuitants ask themselves and it is not easily answerable. There are so many different things to consider, from your own personal financial situation through to the present and future economic outlook. Although rates have been falling for a prolonged period, there has been the odd spike when they have risen slightly. One thing to consider is if economy improves markedly in the future, you could be missing out on potential income and you will be locked in to a rate given when conditions were less favourable.
Also consider every month you delay the purchase of an annuity, you are missing out on the income you would have had, had you gone ahead and bought an annuity. Conversely, buy an annuity too early and you could miss out on potentially higher rates. You should also think about your own situation, will it change in the future? Remember once you buy an annuity you cannot change it, so think VERY carefully before going ahead with a purchase.
We advise you to take specialist advice, but on no circumstances should you accept your first offer. You must shop around between pension providers and see who has the best deal for you. There are dozens of different annuities on the market to cater for every eventuality of your finance situation. For example, you can have short-term annuities, which will remove the lifetime commitment of an orthodox annuity. Other options include annuities the help shield against inflation and also annuities which allow for a higher element of risk, with the chance of greater rewards.
Whatever you choose, seek professional advice and consider the long term.
