Record low annuity rates makes it 'essential' to compare providers

Thousands of people who are approaching retirement that have been saving into a defined contributions pension scheme will be worse off than their predecessors because of record low annuity rates. A typical 65 year old male with a £100,000 pension fund can expect little over £6,000 in retirement income when buying a standard annuity. Twenty years ago that figure would have been closer to £15,000, leaving many retirees wondering whether or not they should even bother buying an annuity or not.

Oscar James, head of marketing at Annuity City, argues that it is essential that those who are considering annuities in retirement compare providers for the best deal. He said that…"…there are a number of different factors pushing down rates including the affect of quantitative easing, low interest rates plus increasing levels of life expectancy. On top of that there is the ban on gender pricing plus the impact of EU Solvency II legislation. All this means rates have suffered but retirees can help themselves get a better annuity income by comparing providers." Not all providers offer the same annuity rates or products, so shopping around is essential to maximise your retirement income. If you are eligible for an enhanced annuity you could increase your annuity offer by as much as 40%.

Using the Annuity City site users can find useful information about the various types of annuity on the market in addition to being able to read the latest industry news. There is also information relating to alternative products such as income drawdown, which is popular with wealthier retirees. Users of the site also have the option to submit their details and get in contact with a retirement specialist who can offer further information and assistance.

Buying an annuity is a once in a lifetime event so making the right choice first time is absolutely vital. Mr James says that even if you are not eligible for higher paying enhanced annuities, you could still benefit from shopping around. He says…"….just by making a comparison you could increase your offer by 10 to 15 % as some providers are more competitive than others".

About Annuity City.

Annuity City is a leading provider of annuity rates information. By completing one simple form those approaching retirement can be connected to a team of financial advisors with specialist knowledge of the retirement market.