We have become used to annuity rates going in just one direction - down, so a recent rise in rates has come as a welcome change. The experts highlight that while now is a good opportunity to take advantage of the rise, there is another way to get yourself a better rate at any time.
Rates have been increasing over the past few months, partly because bold yields have been rising, and also because of competition in the market. They hit a low back in August, and have increased over 10% since then. The competition in the market remains healthy, but with an unpredictable political and economic backdrop, nobody can guarantee annuity rates will remain at these levels.
It means it's essential to track down the best possible rate, and there is a great way to do this at any time.
Health and Lifestyle
The annuity market within the UK is arguably the most sophisticated in the world and as a result can tailor the policy to your personal circumstances, taking your lifestyle and health into consideration.
If you suffer from a health condition, which means you are likely to have a shorter than average life expectancy, Insurers will reflect this by offering you an increased income due to the shorter period of time your pension pot would have to cover. These increased annuity rates are offered by "enhanced" annuities, sometimes known as "impaired-life" annuities. Should you qualify for an enhanced annuity, you could obtain up to 40% more pension income1 depending on your circumstances.
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Not all providers offer the rates attached to these special policies, so some shopping around is required. Specialists like, Age Partnership can search the whole market for you, including the specialist policies, to track down the best possible rate.
If you are unsure as to whether an annuity is the right option, they also have financial advisers who specialise in retirement income. They can assess your circumstances and objectives. If an annuity is the right approach for you, they will help you track the best one down, and if not, they will guide you through the process and discuss all your options with you.
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1 Research by Moneywise shows that the usual increase based on health and lifestyle factors is up to 40%