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New tool launched to compare annuities

New tool launched to compare annuities

Category: Annuities

Updated: 22/08/2013
First Published: 22/08/2013

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

For the first time ever those approaching retirement will be able to compare sample annuity rates from the UK's leading providers using a tool on the Association of British Insurers' (ABI) website.

The move forms part of the ABI's latest drive to improve annuity transparency as well as encourage more people to shop around to find the best deal.

The ABI says the sample rates should not be considered the same as a best-buy table, but have rather been designed to show those planning on buying an annuity how rates can differ from provider to provider.

For example, the ABI tables reveal that a 65 year old who buys a standard level without guarantee annuity with an £18,000 pension pot could receive an annuity of between £1,099.92 (highest rate from Reliance Mutual) and £839.52 (lowest rate from Scottish Widows, Clerical Medical and Halifax) per year.

However, critics have pointed out that the ABI's annuity sample tables do not necessarily paint a comprehensive picture since they only list the trade body's members.

This means that some providers that often offer market-leading rates, such as Hodge Lifetime, have been excluded.

Commenting on the ABI's publication of annuity rates, Richard Eagling, Editor of Investment Life & Pensions Moneyfacts, said it was "vital" that consumers are encouraged to shop around for the best annuity deal and compare rates.

"The ABI's specimen annuity rates will certainly add a welcome level of transparency to the annuity market especially as it includes rates for internal and external customers," he said.

"However, it is by no means a panacea to the low-take up of the open market option, and much more needs to be done by the industry to encourage individuals to seek expert financial advice at retirement."

Remember, an annuity is an income for life, so if you are planning on purchasing one, it is always a good idea to seek independent financial advice first as well as make sure you shop around in order to achieve the best possible annuity rate.

What Next?

For help or to compare annuity quotes online - Call moneyfacts annuity service on: 01737 233435

For a list of sample annuities, visit the ABI's website

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.