When buying a pension annuity, it is vital to search the market for the best rate as once bought, they cannot be cancelled, explains Helen Morrissey, head of retirement analysis at Hargreaves Lansdown
Annuities can give you real peace of mind, securing a guaranteed level of income that ensures you meet your day-to-day needs in retirement. However, you need to choose carefully.
Once bought an annuity cannot be unwound, so if you don’t shop around, you risk missing out on thousands of pounds over the course of your retirement. It’s very much a case of acting in haste and repenting at leisure.
Different providers offer different quotes. A recent search on HL’s annuity search engine showed the difference between the top and bottom quote for a 65-year-old with a £100,000 pension, looking for a single life, level annuity with a five-year guarantee, was £647 per year. Stretch this out over a twenty-year retirement and you are missing out on almost £13,000 in income, so it’s well worth taking the time to check.
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