What is an annuity?

• An annuity is a secure income normally paid for the rest of your life.
• During your working life your pension builds up a pot of money. An annuity is the regular income that is bought with your pension fund at retirement.
• Once set up, the annuity is normally fixed and offers a secure income for the rest of your life. As it cannot normally be changed it is very important to consider your options carefully.
• Annuities are also known as 'secured pensions'

Do I have to take tax free cash?

• No, although it is your chance to take some of your pension tax free.
• If you choose not to take the tax free cash all your pension fund will be used to provide an income. This will enable you to obtain a higher income, but this will be subject to income tax in the usual manner.
• If you decide not to take tax-free cash, it cannot be taken at a later date.

Do I have to purchase an annuity through my existing pension provider?

• No. You will often find that you can obtain a higher retirement income by taking the 'open market option' and purchasing your annuity through an alternative provider.
• Get a free, no obligation open market quote now. This will allow you to evaluate your annuity options and compare the rate offered by your own pension provider to those offered by other providers.
• You should consider staying with your existing provider if they offer you something known as a guaranteed annuity rate, which may pay a higher income than an annuity available elsewhere on the open market

Where can I buy an annuity?

When you retire you will most likely receive an annuity quotation from your pension provider. Many people do not realise that you do not have to take your annuity from that provider and in most cases it will benefit you not to do so. Instead you can choose to take the 'open market option'. This means you find another company to provide your annuity, and if you search a number of providers the chances are you'll find a better rate.

Is there a difference between annuity providers?

• Apart from the differences in the annuity income each provider will offer, there are a number of other aspects you may want to consider (particularly if the difference in income between providers is minimal).
• Financial strength is an aspect that you may want to take into account considering your annuity may need to be paid for 30 years or more. If you obtain a quote from Annuity-Quotes.co.uk, you will be provided with financial information on each annuity provider.

Are the annuity rates guaranteed?

• We do everything possible to ensure you get the same annuity rate as when you received your annuity illustration; however annuity companies do change their rates.
• If the funds are not transferred from your pension provider to your annuity company during that guarantee time and the annuity rates have changed, then your annuity will also change.
• It is therefore important that you try to return the appropriate forms and applications to us as soon as possible after receiving them.

Can I get a better rate if I am a Smoker?

If you smoke cigarettes regularly and have done so for the past 10 years make sure you declare this when completing a quote as it may mean you qualify for an improved rate.

Can I get a better rate if I suffer from an illness?

Some illnesses or medical conditions mean you can qualify for an enhanced annuity rate. This could secure a rate as much as 40% better than a standard annuity therefore it’s important you provide as much detail as possible about your illness and medications.

How do I get financial advice?

We have a team of professional Independent Financial Advisers who are able to provide advice on a wide range of financial matters. Call 0800 840 1257 to find out more or arrange an appointment in the comfort of your own home.

How safe is an annuity?

• Annuities are generally provided by insurance companies and offer a secure income paid for the remainder of the policyholder's life.
• The financial security of an insurance company is important as the annuity may need to be paid for a period of 30 years or more.

What happens if I die after buying an annuity?

If you die after taking an annuity then typically there will be no further payments or lump sum paid to a beneficiary. However, when purchasing an annuity you can select certain guarantees to ensure certain money is paid.

• Guarantee period - You can select a guarantee period of up to 10 years (5 for protected rights). This will mean that should you die within the selected period the income will continue to be paid until that time expires.
• Joint life option - You can select a certain proportion to continue to be paid to your spouse or other dependant upon your death.
• Value protection - If you die before a pre-set age (which used to be 75) and the total gross income paid out is less than the amount of the fund used to purchase the annuity, the balance will be paid less a 55% tax charge. Selecting the options above will affect the income you receive from your annuity. The degree to which it is affected will depend on your circumstances. Please note tax rules can change and their value will depend on the circumstances of the investor.