Tag Archives: Types of Annuities

Shake the Hand of the Annuity Provider Offering the Best Annuity Deals!

With annuity rates being depressingly low, those on the verge of investing in an annuity are facing a dilemma – wait for the rates to improve, or choose from one of the annuity deals available now and make the best of it. Keep waiting and hope that you get a better deal, or shake the hand of the annuity provider offering the best deal right now?

Annuity rates depend on a number of complex factors, and according to financial experts, the rates are not set to improve significantly, at least in the short term. However, there could be tiny fluctuations in the rates from time to time. But delaying investing in an annuity may mean that the lost income due to the delay may be far bigger than any gains from small fluctuations in rates.

Even though rates may be low at the moment, there are various types of annuities available on the market, and you can find a product that best suits your needs and offers an income that you are comfortable with. A financial advisor can guide you through all the types of annuities, as well as your own needs and make an informed choice.

Waiting for better annuity deals may prove to be a bad idea on three levels. One – it may mean that you lose out on regular income due to the delay, two – while you are waiting for annuity rates to improve, rates may go even lower, and three – any attractive deals and offers currently available could be withdrawn without any notice. Unnecessarily delaying investing in an annuity in the hopes of better annuity deals may therefore mean that you not only find a better deal but also make a loss in the process.

Popular financial products being withdrawn is not without precedence. The Halifax Retirement Home Plan is a good example of this. The Halifax Retirement Home Plan was a highly popular mortgage that was withdrawn without any notice in August 2011. This was the only flexible interest only equity release plan of its kind at the time and left a lot of people who were interested in it without any other option.

In fact, annuity rates, annuity deals and indeed annuity products can be withdrawn, updated or changed on a day to day basis. Waiting for rates to improve may mean that you not only have to commit at a lower rate in the future, but could also mean that you do not get the specific type of annuity that you wanted in the first place.

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.

Choose an Annuity sooner rather than later!

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.

Free Annuity Specialists Who Will Help Compare Annuity Rates

Annuity specialists and Independent Financial Advisors (IFA) can offer impartial and unbiased advice about the different annuities available on the open market. They can help you compare Annuity rates, compare different products, and understand the different types of annuities and choose a product that can best suit your individual circumstances and needs.

Professional independent financial advisors offer their services based on two types of payment – either an upfront fee, or a fee in the form of a commission. Upfront fee rates can range from £75 to £250 per hour depending on the location, type of advice etc. While an upfront fee is paid as a single upfront payment for the consultation and advice, a commission fee is paid only when you actually decide to buy an annuity through the advisor.

This means that you can receive free independent and impartial advice not just to compare annuity rates, but potentially until you need it, and until you have made a decision. The IFA is paid only when you buy a product through them. Irrespective of whether you agree to an upfront fee or a commission fee with your advisor, an independent financial advisor is qualified to offer completely unbiased and impartial advice and help you choose the most suitable product.

While an independent financial adviser can certainly help you compare annuity rates and find the best deal, there is yet another good reason to consult a financial adviser while choosing an annuity. Professional financial advisers often have access to exclusive deals and offers directly from the providers. These deals may not be available on the open market to customers, unless you buy the product through an adviser.

It is always a good idea to compare different advisers and choose one with the most experience and professional credibility in the field. Personal recommendations and references always help. But do not be afraid to shop around online, or locally too. Always make sure the independent financial adviser you choose is truly independent and not tied down to a particular company or companies.

If you are not sure if annuities are the right option for you and need independent advice about the best solutions for your circumstances, look for advisers with a broad field of expertise, rather than just an annuities expert. Unlike a specialist within a narrow area, a financial adviser with knowledge of the entire sector could help you explore more options and make the best decision.

Whether you need to compare annuity rates or simply need some friendly yet professional advice about your finances – an independent financial advisor could help you.

Are you a Baby Boomer looking for Annuity Solutions?

For baby boomers, retirement is quickly approaching. With retirement, come several questions as to how retirement can be funded, how the lifestyle to which consumers have grown accustomed can be maintained even after the working years have ended. However, there are options available to consumers, including baby boomers that are looking for ways to retire comfortably and quickly. Two of the most prevalently used options available to baby boomers are annuities and equity release schemes, both of which could potentially help consumers retire comfortably and on their terms. Between both of these retirement options, each consumer should be able to find a way to retire that fits their individual and unique needs.

Annuities

There are several different types of annuities available to consumers, each with their own set of advantages and disadvantages.  However, most of them operate similarly in that the consumer trades in their pension savings in return for income that is guaranteed for the rest of their life.  The income is guaranteed and relies most substantially on the pension savings that has been accrued by the consumer. Once the consumer has chosen their annuity, no alterations may be made. That is to say that the consumer needs to ensure that they are making the right decision when they choose their annuity. With so many options available, the choice can be challenging but it can also be worthwhile in that it guarantees a certain level of income for a predetermined period of time, most often the lifetime of the insured.

Equity release

Equity release schemes are another options available to baby boomers, and any other consumers who are nearing their retirement years. Equity release schemes are available to those UK homeowners who are aged 55 or older. The purpose of the scheme is to allow the consumer to receive tax-free cash from the value of their home. This cash can be spent however the consumer sees fit. It works best for those consumers or baby boomers who are looking for a tax-free lump sum to help fund retirement, the ability to release cash whenever most needed, or the freedom to spend cash independently.

Regardless of how baby boomers choose to fund their retirement, whether it be through equity release mortgages, annuities, or other investment strategies, they should always consult with a financial adviser before investing in any particular strategy in order to ensure that the decision is the best one possible for each baby boomer’s individual and unique retirement needs.