Annuities - compare annuity rates

  - Make the most of your retirement income and be sure to shop around to get a better rate.
 
We’re here to help you make the right decision:
• Compare annuity rates from annuity providers to get the income that suits you
• Free, indicative quotes, available online, or by phone
• Boost your retirement income if you qualify for an enhanced annuity
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The Moneyfacts Annuity Service is provided by Just Retirement Solutions Limited.

Shopping around for an annuity can seem daunting, but if you wish to benefit from a guaranteed income for life, an annuity could be the way forward.

Getting your annuity to match your income requirements is a big decision. Here’s how the Moneyfacts Annuity Service can help you.

Take full advantage of the Open Market Option

It is a common misconception that you can only purchase your annuity from your pension provider.  However, if you shop around you could increase your retirement income.  

You may also know that the decision to buy an annuity is an inportant one to get right, so that it can meet your income needs.

What income you will get from your pension pot will vary based on a number of factors including how big your pot is, to which options you decide to include in your annuity. These include whether you want an income that increases over time or not, and whether you want to ensure any dependents have some income should you die before them.

We can help you shop around

The Moneyfacts Annuity Service is a non-advised comparison service that could help you get up to 40%* more retirement income.

Our Online Annuity Planner will also assist you while shopping around for a better annuity rates providing help with the following:

  • Comparing quotes from a variety of annuity providers
  • Establish whether you qualify for any ‘enhancements’ due to health and lifestyle which could further improve your retirement income
  • Understand all the options you have to help protect your income against inflation, extend payments to your dependents etc
  • Show the effect that taking each option will have on your income

Do you qualify for an enhanced annuity?

Providers of standard annuities offer different rates largely based on age. But many people may have a health condition or lifestyle that could qualify for an enhanced annuity.

If  you qualify for an enhanced annuity,  you could increase your pension income by as much as 40%* (depending on your health and lifestyle). To help you make the right decision, Moneyfacts Annuity Service can help you by comparing annuity rates from standard and enhanced annuity providers quickly and easily.

There’s a range of health and lifestyle conditions that are considered by enhanced annuity providers. 

Answer the following questions to see if you qualify for an enhancement:

  1. Are you a smoker?
  2. Do you have high cholesterol?
  3. Are you overweight?
  4. Do you have serious or life-threatening medical conditions?
  5. Do you have raised blood pressure?
  6. Have you ever been hospitalised?

If you feel you might qualify for another condition it is worth giving us a call or visiting the Moneyfacts Annuity Service.

Make sure you choose the right optionfor you

The government has removed the restrictions on what you can do with your pension savings. This means that you will be able to choose the option that’s right for you.

Pension Wise is a new government service that offers people approaching retirement free, impartial guidance about their choices. You can receive Pension Wise guidance online, over the phone or face to face.

Pension Wise will provide tailored guidance to explain what options you have and help you think about how to make best use of your pension savings. It will offer information about the tax implications of different options and other important things you should think about, as well as tips on how to get the best deal, including how to shop around.

Choosing what to do with your pension savings is an important financial decision and it is often possible to get more for your money by shopping around.

If you have decided to use your pension pot to secure yourself a lifetime income, the Moneyfacts Annuity Service (a non-advised comparison service) is here to help you shop around and compare leading annuity providers. The service could help you get up to 40%* more retirement income.

Receive 25% of your fund tax-free

You are usually permitted to take up to 25% of your pension fund at the start of your retirement as a tax free lump sum. This is known as the Pension Commencement Lump Sum (PCLS).

If after April 2015 you choose to take your entire pension pot or pots as a lump sum, this will not increase your tax-free entitlement. Therefore your tax-free entitlement will remain at 25%.  The remainder will be taxed as income at your marginal rate, which could potentially mean being taxed at 40% if your pension pot is large.

Interim rules for small pots

Under new rules following the March 2014 budget, if your pension pots across all your arrangements total £30,000 or less, and you are aged 60 and over you, can take the whole of it as a lump sum, which is an increase from £18,000. Small pots up to £10,000 can also be taken as a lump sum (up to three such pots). This is known as 'trivial commutation'. To find out more, visit www.hmrc.gov.uk/pensionschemes/small-pen.htm

If you do choose to take your entire pension pot or pots as a lump sum, this will not increase your tax-free entitlement. Therefore your tax-free entitlement will remain at 25%.  The remainder will be taxed as income.

You can also leave your pension invested using a product called a drawdown pension. A drawdown pension allows you to draw some income from your pension fund as an alternative to taking out an annuity. The maximum income you can take is set currently within government limits, although the March 2014 budget statement proposed to remove these limits from April 2015. 

Taxation of death benefits

From April 2015, the taxation of death benefits on pension funds has changed

The changes apply to drawdown pensions, and annuities that have “value protection” included as an option. This means that on death before age 75, a lump sum benefit from a drawdown or value protected annuity will be paid to any beneficiary tax free. If death occurs after age 75, the proposal is to reduce the tax from 55% to 45%, and then to marginal rate tax from 2016/2017.

If a dependants pension has been chosen rather than a lump sum, to continue the income in the event of death, the income will then be tax free for annuities and drawdown, however if death occurs after age 75 it is still subject to the marginal rate of tax . 

Guide to buying an annuity

Our partner Just Retirement has created a guide to buying an annuity. The guide will help you to consider the financial choices that can lead to your money going that bit further in retirement.

The guide will help you to:

  • Plan for your retirement
  • Understand your savings,
  • Explain the options you have to provide an income in retirement.

Click here to download your FREE guide to buying an annuity

Try our free online Annuity Planner

Our handy online tool takes you through your choices in retirement, helps you learn about annuities and compare the latest annuity rates from a range of providers.

Once you’ve chosen, we’ll manage the entire process on your behalf, ensuring you receive the retirement income you deserve hassle free.

Click here to try Moneyfacts Annuity Service

*Source date: 12/03/2015. 40% is achieved by comparing the lowest standard annuity rate against the best enhanced rate for a person who is overweight, has been diagnosed as having Diabetes Type 2 with complications, has suffered a heart attack requiring surgery in the last six months and is taking a total of four medications daily. Quotes are based on a RH2 7RT postcode, for a 65 year old individual with a pension pot of £25,000 with a 5 year guaranteed period, no escalation, no value protection and paid monthly in advance, which have been obtained from a representative sample of providers via Just Retirement Solutions Limited. The comparison is based on rates available via the open market option only and it should be noted that smaller increases will be achieved for less serious medical or lifestyle conditions.

** Just Retirement Research April 2013

What next?

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Moneyfacts.co.uk Limited (Registered in England and Wales, No. 6615303). Registered office: Moneyfacts House, 66-70 Thorpe Road, Norwich NR1 1BJ. Moneyfacts.co.uk Limited is authorised and Regulated by the Financial Conduct Authority.

The Moneyfacts Annuity Service is provided by Just Retirement Solutions Limited. Registered office: Vale House, Roebuck Close, Bancroft Road, Reigate, Surrey RH2 7RU. Registered in England No. 05125701. Just Retirement Solutions Limited is authorised and regulated by the Financial Conduct Authority. Please note your call may be monitored and recorded. 

 
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