Why you should shop around when buying an annuity

Published 29th January 2024

A vital aspect of retirement planning is choosing the right pension product. If you’ve decided an annuity is right for you, shopping around for the best annuity rate is a smart move. One that can significantly impact your long-term financial well-being. It’s important to remember that you don’t have to stay with your current pension provider. Exploring the market can help you to not only find the best annuity rate, but also the right kind of annuity for you.

Research from our Get Britain Pension Ready campaign found that 30% of those surveyed didn’t know they could shop around with their pension potfund and transfer savings to another provider. 

Here's why it's a good idea to shop around for your pension annuity.

Maximise your income with the best annuity rate

The annuity rate is the annual income you receive from your pension savings. Different providers offer different rates. By exploring your options, you increase your chances of securing the highest annuity rate on the market. After all, following the 30-day cooling off period you can’t change your mind once your annuity is complete. So, it makes sense to take your time and not take the very first one you’re offered.

“A lifetime annuity is just one of the retirement options available. It provides a guaranteed income for life."

Sarah Lloyd, Commercial Director at Annuity Ready

Explore all of today's annuity rates

Annuity rates fluctuate based on various factors such as economic conditions and the interest rates set by the Bank of England. By shopping around, you can stay informed about today's best annuity rates. Being informed is essential for helping you to make good decisions. Regularly checking the current market rates will help you capitalise on favourable conditions. In turn, this will help you secure the best possible income from your pension.

Find competitive rates through comparison

Annuity rate comparison is a powerful tool in finding the best deal. Different providers may offer unique features and rates. By comparing options, you can identify the most competitive products tailored to your needs. This is something that can make thousands of pounds difference a year to your pension.

Consider your individual circumstances

Every retiree has unique financial circumstances and preferences. Shopping around enables you to find the best annuity provider for you. One that best meets your individual needs. Don't just think about getting the best annuity rate. Consider other factors like inflation protection, annuity type and any additional benefits offered. This wider thinking will help make sure that you have a plan in place that is most beneficial for you.

Keep an eye out for good deals

The financial landscape is dynamic. New providers may enter the market with attractive rates. By shopping around, you increase the likelihood of discovering hidden gems. Annuity products that could offer better terms and higher incomes. It pays to be proactive in exploring your options to secure the best annuity rate available.

At Annuity Ready we can help you compare lifetime annuity quotes from all providers in the annuity open market.

Don’t settle for the first offer

It's important to note that you don't have to buy your annuity from your current pension provider. It may seem convenient, but this approach can limit your options and your retirement. Take the time to explore your options and choose the annuity that best suits your individual needs and circumstances.