How do I get more annuity income at retirement?
Posted September 14th, 2009
Here are three simple tips to increase your income in retirement.
1. Use the Open Market option
Did you know that not all annuity providers are equal. Having saved all your life into a pension, you might expect that the income on offer from your existing provider would be competitive. However, this is not always the case and it can pay to shop around.
In my experience, increases in income of up to 25% are not uncommon. So, based on the average pension pot at retirement of £24,000, this increase is roughly the same as having an extra £6,000 added to your retirement pot.
2. Enhanced Annuities
It is estimated that 40% of people would qualify for an enhanced annuity as they have smoked, are taking or have taken prescription medication and have been hospitalised for a medical condition. If this is you, an enhanced annuity could seriously boost your annuity income even further. Based on the average £24,000 pot, an enhanced annuity could add nearly £10,000 to the basic pot, an increase of c.40% .
If you are suffering serious medical problems, you may even qualify for an impaired life annuity which will offer much higher rates of income based on a lower life expectancy.
It pays to check whether your annuity provider is taking your medical history into account.
3. Advice pays
Financial advice on annuities is not free but by going direct you may think that this will save money. However, the costs associated with selling an annuity cover a number of things - advertising, commission, etc. These costs are not discounted when applying direct with a provider.
Further information
Our retirement review service can help you to make the right choice – and maximise the income available.. We take a detailed look at what you have, what your plans are and what can be done – and then seek out the best solutions for you.
If you would like more information, call us on 01204 663904 and we can discuss the benefits and outline the process in more detail, without any obligation on your part. It will take only a few minutes – but could end up saving you thousands of pounds.