If you have decided to set up an annuity it can make good sense to act sooner rather than later. By deferring your annuity purchase for just one year you could be losing out on valuable income that may take decades to recover.Many people delay buying an annuity with the notion that the older you get, the higher the annuity tends to be. This is indeed true; if you delay by one year for example you may be able to get a slightly higher rate due to your age (assuming rates do not fall in that time). What many people do not take account of however, is the income they miss out on during the time they delay.
Our research has shown that if you delay by just one year, it could take as long as 39 years for any small increase in the annuity rate to make up for the income you missed out on during the time you delayed. (This assumes all other factors stay the same and rates are as at 01/06/09 for a male aged 65 and 66 on a fund of £100,000 and assumes no fund growth during the one year delay). Even if we assume that the £100,000 pension fund grew by 3% after charges in the intervening year, it could still take 17 years to fully make up the difference.
That doesn't seem that great a deal.
It's also important to remember that annuity rates change on a regular basis, and your annuity rate is not guaranteed until your chosen annuity provider receives your pension fund from your existing pension company. Therefore, if you have found an annuity rate you are happy with and have decided the time is right to buy your annuity, it is vital that you act quickly to secure your desired income. And remember, the sooner you apply, the sooner you will begin receiving an income from your pension.
To apply for your annuity you simply need to read the terms & conditions and then send us the completed application form for your chosen provider. You can download the appropriate form now from our website by selecting the application form at the end of the quotation process. Alternatively you can call us on 0117 980 9940 and we can send you an application form in the post.
Remember we're here to help. If you have any questions when completing your annuity application form or at any other time when buying your annuity, please do not hesitate to call our specialist help desk on 0117 980 9940. If you are unsure about your annuity or how to proceed and would like advice, please contact us and we can put you in touch with an adviser.
