Annuity rates have been low for quite some time now. Last year, in August, annuity rates reached record lows and have not recovered significantly since. In this economic climate, does it make sense for pensioners to delay investing in an annuity in the hopes of better annuity rates? Or does it make more sense to choose an annuity that best suits your needs at the moment and commit to it?

The fact is that annuity rates are constantly dropping, and although small fluctuations can occur, waiting for any significant improvement in annuity rates may mean that you lose out on better rates today. Experts have warned customers not to dither and wait for rates to go up, and to shop around for the best rates and choose an Annuity sooner rather than later.

There may be small fluctuations in annuity rates, but waiting for these small rises will only mean that you lose out on the income you could have received by investing in an annuity sooner. When compared to the level of rises that we have seen recently, waiting could mean you lose out on much more money than you gain from the increase in rates!

The key to making the best of the annuities available today is to shop around for the best deal and choose an annuity that best suits your needs. A surprisingly large number of people are not aware of their right to shop around on the open market and therefore simply accept the deal they get from their pension provider. Research shows that shopping around could mean getting up to a whopping 46% more income than you would with your existing pension provider.

There are several types of annuities available on the market – from investment linked annuities, level annuities, inflation linked annuities, to enhanced or impaired annuities. In case of couples you can also choose an annuity that guarantees income or a lump sum payment to the surviving partner – also known as joint annuities. You can have protection against early death by including an early death clause that guarantees payment to your beneficiaries.

There are many ways in which an annuity can be used to optimise your savings and make the best of them during retirement. The key is to choose an annuity sooner rather than later – at least in the short term – and to shop around for the best product that suits your circumstances and priorities.