Buying an annuity

[madmother1]

I can claim my pension this year from a major banking company. They have written to me with a quote of what I can expect to be paid. I've googled to see if I can get more per month and it seems I can. Has anyone else, ditched their first company and bought an annuity from another? The paperwork does advise that you can do this?

Pensions adviser here - I would always advise to see what annuity rate could be achieved on the open market, especially tailored to your individual circumstances. You may qualify for an enhanced annuity (depending on health & lifestyle factors) whereas the quote you've had from your own provider will be based on very standard terms.

Yes definitely always shop around! Many people do (though not enough probably due to laziness or not understanding how it works). You’re going to be stuck with that income for the rest of your life so it’s important to spend some time to get it right. You can also combine funds eg if you’ve got personal pensions with 2 different companies you can transfer them both to buy an annuity with a third company.

You can get an adviser to do it all for you (you’d usually pay some sort of a fee if you end up applying through them) - best to go for a whole of market adviser - or you can shop around yourself. Set aside a bit of time as it can be a long conversation to go through the various options you want. The company I work for schedules phone appointments as it can take 30-40mins to go through the various options and all the risk warnings they have to give you. An adviser would guide you through what all the options mean and which might be right for you.

Your pension company should have given you details for Pension Wise who can help you navigate it all too.

And agree with PP, shop around for an enhanced annuity too as different companies will rate illnesses and lifestyle factors (postcode, smoker status) in different ways. You might qualify for enhanced rates with some but not others, depending on their underwriting criteria. Not all annuity companies offer enhanced annuities. The sicker you are the more income you get so it’s in your interests to disclose everything (accurately obv - they can check up with your GP).

The exception to all of this is if you have some sort of special guarantee like a guaranteed annuity rate or a final salary/defined benefits scheme - then your existing provider will probably be worth sticking with.