Tag Archives: Annuity Providers

Annuity UK: All You Need to Know

There is so much information about annuity UK, that it can be difficult to find your way through all the facts to what is absolutely necessary. So here are the basics of annuity UK. An annuity is an exchange that you will have the choice to make when you reach retirement. About six months before you retire your current insurance company will send you information about their annuity rates and what your options will be. If you do decide to take out an annuity, you will then exchange the lump sum of your pension for an annuity. And that annuity will guarantee you an income for the rest of your life.

There are a few important things to remember here. You are under no obligation whatsoever to choose the annuity offered by your current insurer, and in fact you should absolutely look around at other annuity providers and find the best annuity UK rate that you can. You can also take up to 25% of your pension as a tax-free chunk which you can then do with what you like. Some people use it to pay off debts or the mortgage. It is also really important to remember that once you have bought an annuity, you cannot get that money back, which is why it is so important to do your research and find the best annuity UK rate and option for yourself.

When you buy an annuity, the annuity provider will use that money to buy gilts or bonds. These are like government IOU’s and are typically a low-risk investment. However, at the moment annuity UK rates are at an all-time low, and so the question of when to buy an annuity is also important. For most people waiting a few years for the market to stabilise is not an option because you will just be eating into your savings.

This is why it is vital to make the most out of whatever annuity UK you choose. It is also advisable to apply for an enhanced annuity. The majority of people miss out on this opportunity, but if you have health conditions, are a smoker, overweight, on prescription medication or any other physical illness or limitation you should apply for an enhanced annuity UK, because you will get a higher income each month. Take all of your options into consideration before making any decisions about which annuities to go for.

The Current State of the UK Annuities Market

The UK annuities market is in turmoil. This might seem like an exaggeration, but unfortunately it is not. For those who are nearing retirement the option of buying an annuity is simply not what it has been in the past. A few years ago you could buy an annuity when you retired and legitimately expect it to give you a fair degree of financial stability. Which is after all what they are designed to do – to make sure that you have a regular income from the moment you retire until your life ends. This is the brief of an annuity and unfortunately the UK annuity is just not taking care of retirees like they once did.

The current UK annuities market is being affected by a number of exterior forces. Because annuities are in essence a financial product they will be susceptible to changes in the market. With uncertainly prevailing in the Eurozone, the effects on UK annuities have been unsettling to say the least. On the one hand the uncertainly of the Euro remaining the single currency through Europe has meant an increase in gilts and bonds which have decreased UK annuities rates. On the other hand the Bank of England is also printing more notes, which has negatively affected the annuities rates.

Added to this is the new gender ruling, which prohibited annuity providers from offering different annuity rates, based on gender. This will mean that annuity rates for men will in all likelihood decrease, while UK annuities for women will remain the same. There is also the Solvency 2 ruling, which will force insurance companies to be more circumspect in their investments, and this will also negatively impact UK annuities rates.

There is some logic to the idea that there is a natural floor to how low UK annuities rates can go, and it would seem that we are pretty much there. The floor would mean that a person would simply get back the amount of money they invested in the first place, with no extra from the investment. This is where the UK annuities market is heading, but after that, once the Eurozone has settled and the financial markets begin to stabilise, there is a good chance that annuity rates will improve. It will take a few years for this to come into effect. But the outlook is not completely dark; there is some light at the end of the tunnel.

What is Annuity?

If you are approaching retirement age then you will have come across this thing called an annuity. Even if you are starting a job for the first time, and making your first payment to a pension you may have heard the word annuity. But what is annuity? An annuity is a way for you to take care of yourself financially once you retire. For some this may seem like a faraway thought, but for others it is right around the corner. No matter your age, what is annuity is a good question to be asking.

During your working life you have been saving a pension, either just with your employer or perhaps you also have a private pension fund. In either case, when you retire you will need to find a way to make that money last for the rest of your life. You, however, have no idea how long that might be and budgeting for a lifetime can be extremely difficult. Not to mention that living expenses are increasing every year, and the money you have saved simply won’t go as far as you would like.

This is where knowing what is annuity, can come in handy. With an annuity you will exchange the money you have saved through your pension for an annuity and this annuity will guarantee you an income for the rest of your life. Annuity providers use the average life expectancy to calculate how long one might live and how much money they will need over that time. This is of course only an estimate, but when you come to look into what is annuity, you will come across annuity calculators. This calculator will ask you to input your gender, age and any medical conditions and with this information it will offer a possible annuity rate.

That rate will be the rate of return that you will receive from your investment. When you give the insurance company your pension, they use the money to buy government bonds and gilts and it is the return from this investment that gives you your regular income. There are many different options to consider if you decide to take out an annuity. But the first step in understanding those options is understanding what is annuity. It is not complicated, but there is a lot of information available so it can be a bit overwhelming.

FSA Annuity Rates

The FSA, or Financial Services Authority is an independent body which is dedicated to regulating financial services industries in the United Kingdom. They are responsible for a number of different areas of regulatory practice, from investigations and rule-making to making sure those rules are enforced. Basically the FSA is around to make sure that financial services companies behave in a responsible and ethical way.

After the troubles of recent years, the importance of the FSA is all the more appreciated. While the FSA is responsible for a whole realm of financial services industries, it is responsible as part of this for keeping an eye on insurance companies and annuity providers. And they release FSA annuity rates on a regular basis, so that you can know what the baseline should be.

FSA annuity rates are an important part of keeping annuity providers honest, but FSA annuity rates are also a good tool for you to use to get an idea of what rates are available and how competitive they may or may not be. This is a huge advantage because there is an absolute wealth of information about various annuity providers and the rates that they offer. It can therefore be a bit difficult to find your way through all of the information.

However, with FSA annuity rates, you have an excellent and trustworthy guide to what you should be able to expect from your annuity provider. The FSA is working on your behalf. It was this organisation for example which enforced a ruling which permitted people to choose the annuity provider they wanted, rather than just sticking with the annuity offered by their current insurance company. It was also the FSA that made sure that insurance companies send you information about your options before you are due to retire.

It can be difficult in all of the jargon and all of the numeracy to find your way clear to a decent understanding of what annuities are and how they work. Without this understanding it is even more difficult to find an annuity rate that will help you get through the financial difficulties that retirement poses. This is why the FSA was set up, to help you make financial decisions, and to regulate the companies that you will have to turn to. So if you are looking into annuities and the rates seem a bit unreliable, the FSA has a breakdown of FSA annuity rates, which can definitely help you.

Online Comparison Websites Will Help You Compare the Annuity Open Market

As we are living for longer, planning properly for financial security during old age is becoming increasingly important. It really is imperative to consider all the alternatives carefully and choose products and investments that will help you optimise your savings and assets. A large proportion of people buy an annuity to turn their pension savings into a steady guaranteed income during retirement. There are many different types of annuities, and several annuity providers. So rather than take the first offer that is made to you by your pension provider, it is advisable to explore the Annuity Open Market and make an informed and well considered decision.

The best place to look for more information about different annuities and how they work is of course the internet, where you can access lots of information about all things annuity related. You can find information on websites of annuity companies, as well as from independent charities and organisations working in the area of retirement finance. Once you have gained some knowledge about the different options available in the annuity open market, you will want to compare different products in order to make the right choice.

There are many comparison websites out there that allow you to compare different utilities, services and products – and the same is true of annuities as well. Today, you can find a number of annuity comparison websites that allow you to compare products from the entire annuity open market. Most websites are free, however, some websites may charge a fee should you decide to buy an annuity through the website at the end of your search.

Some websites offer comprehensive financial advice, tools and other resources to help understand different products and make informed decisions. The newest addition to such websites is Hargreaves Lansdown, which has an entire section on retirement planning, financial products for the retirement sector, as well as an online pension calculator that lets you explore the pension and annuity open market, and calculate the maximum income you could generate. The pension calculator is among other tools like the annuity delay calculator.

Another familiar name has recently been added to the annuity open market and this is Tesco. If recent news reports are to be trusted, Tesco are set to enter the annuity market with its own annuity product in the near future. They are also planning to launch their very own online annuity comparison tool that can help customers compare different annuities and choose one to suit their needs.

Knowledge is Power When Buying an Annuity

Annuities are one of the most popular ways for people to turn their life savings into a regular income during retirement. In fact, the annuities market in the UK is the largest across the globe. There are different types of annuities, but on the whole an annuity works like this: the annuity provider, which is essentially an insurance company, agrees to pay you a regular income, either fixed or variable, for a fixed term, or for as long as you live. As an annuity once purchased cannot be cancelled or returned, buying an annuity is a decision that warrants extremely careful consideration.

The first step in making a correct choice when buying an Annuity is understanding your own needs and priorities. Knowing exactly what you need will help you make the right choice. For instance, is having a fixed, steady source of income throughout your life more important to you than risking a higher income with an investment annuity? If so, a conventional annuity may be more suitable for you. Or, would you prefer to have an annuity that grows with time, at the risk of settling for a smaller pay-out in the initial stages than a fixed life annuity? If so, an escalating annuity might be more suitable for you.

Buying an annuity correctly requires an understanding of the annuity market and how different annuity products work. You can find lots of information about annuities online through advisory websites, or even through different annuity providers. This includes finding out about different bells and whistles that may make an annuity work better for you. Buying an annuity that works best for you is all about looking in the right places, exploring the right resources and using the tools that are readily available to you.

For instance, an annuity calculator can help you determine the maximum income that you could generate through an annuity. Online annuity calculators are now widely available, and are easy to use, quick and convenient. Most calculators require basic information about your age, gender, location, and health and lifestyle habits to work out an accurate quote.

When buying an annuity, knowledge of all the aspects of the process is akin to power. The more you know, and the more knowledgeable you are, the more likely you are to find the right annuity.

How Best to Compare Annuity Rates?

Once you reach the age of 55 you will begin to think about how best to make your retirement savings last for as long as you will need them. This is a difficult proposition, and there are many options that are available to you. About six months before you retire you will be sent an information package by your current insurance company. In this package will be information about the annuities that they have to offer. However, it is in your best interests to compare annuity rates.

If you are even considering taking out an annuity then the worst thing you can do is take the first annuity offer that you get; you absolutely have to compare annuity rates. The first reason is that once you have bought an annuity you cannot get your money back, and the second reason is that if you are going to try to take care of yourself financially for as long as possible you will have to find the best annuity rate to get you through the rest of your life. This is why you have to compare annuity rates.

But what is the best way to compare annuity rates? A good place to start is with annuity calculators. Most annuity providers have these on their websites and with a bit of personal information they can give you an idea of the kind of annuity rate that you can expect from them. These quotes are not guarantees, only a guide. So the next step to compare the best annuity rates is to get an actual quote from the annuity provider. There is also another way to compare annuity rates and that is to go to independent annuity observers like the FSA and have a look at their rates.

By deciding to compare annuity rates in this way you will have an idea of all the annuity rates that are available and what the various annuity providers have on offer. Each annuity provider will have something slightly different to offer and slightly different annuity rates and of course you will want and need the best annuity rate, and annuity package that you can find. Shopping around and making the effort to compare annuity rates is not a waste of time, it is preparing for your future. So take the time and go through the various steps until you find an annuity rate that works best for you.