‘Pension companies prey on their lack of knowledge by failing to highlight choices or ask for basic information that should rule out the annuity they end up buying. Thousands of pounds have been lost to these retirees and even if they do realise their mistake, they are still locked in for the rest of their lives.’ source www.thisismoney.co.uk 5/8/2010
There is a simple solution, Shop around and take some annuity advice from an independent financial adviser. There is a big big difference between the highest and lowest rates from annuity providers. Taking advice will ensure that you get the best possible rate from all the providers. An independent financial adviser is duty bound to act on your behalf and secure you the best possible product.
Over two thirds of people that retire just purchase their annuity from the pension provider they saved with. There is a 20-30% difference between the best and worst rates and using current rates this could cost you £1,000 per annum if you had a pension pot of around £100,000 to exchange.
The other justification for taking annuity advice is that the adviser will check to see if you qualify for any enhancements due to lifestyle or medical. lifestyle is things like smoking and postcode.
