WARNING: The Chancellor announced radical changes to pensions in the March 2014 Budget, which means the guide below is out of date. From April 2015 everyone will have the option to access their cash without having to buy an annuity. We are working on a major update to this guide to highlight ALL the retirement income options available.
We've left the guide here to download if you KNOW an annuity is the right retirement income solution for you and want to know more. For full details of the changes to pensions, see Martin's blog.
This is a full 30-page PDF guide on how to get an annuity. While this guide still applies if you know you want to take out an annuity, the Government has announced that from 2015, everyone will have the option to access their cash without having to buy an annuity so think carefully about what you want before making any decision.
In this guide
Download the old versionThis download is now out of date, we'll release a new guide soon
Who's the guide for?
Buying an annuity is life's most important single financial decision. Most people who save into any type of private pension will have to do this, so if that's you, read this free guide.
An annuity is a contract guaranteeing you an annual payment each year until you die. However, you can't change your mind once it's done, so get it wrong and you'll lose out year after year.
This is a major decision that needs real thought, so this full guide takes you through how to boost what you get, getting advice, alternatives to annuities, other types of pensions, benefits and more.
Annuity Mantras printout
If you're already on this page, the hard work is done. Yet nearly two-thirds of people who get an annuity throw £1,000s away by simply plumping for their pension provider's deal.
Our Annuity Mantras poster takes 30 seconds to read but could net you £10,000. It covers never just opting for your pension provider's annuity, plus having a medical check-up even if you don't feel ill, as you may be entitled to an 'enhanced annuity' that adds serious cash.Click here to view the Annuity Mantras printout in Adobe Acrobat
WARNING! Never accept first deals
A shocking 66% of people just stick with their pension company's deal; yet you've a legal right to go elsewhere.
Need proof of the massive gains possible? Here's an example of the extra cash on offer...
Ivor Pension, 65, has a pension pot worth £100,000. He could typically get offered £4,930 a year when buying an annuity from his normal pension provider - if it's the worst available. However, by going for the best open market option, he could buy an annual income of £5,340.
That's a difference of £410 a year, or a decent £10,250 more income if he lives for 25 years after retirement.
What's in the guide?
If you want a sneak peek before getting the whole thing, here's a quick breakdown and intro for each section of the guide...
The big message:
You do not need to buy an annuity from your pension provider.
The law says there's an 'open market option', which means you can look for the best deal around.
This could increase your yearly income by £100s.
CHAPTER 1 - What happens to a pension at retirement?
Most of us have paid into a private pension, whether a company or personal scheme, at some point during our lifetime. You may even have several pensions. This money has been put aside to help provide an income over perhaps 30 years in retirement, more than half your working life.
CHAPTER 2 - Types of annuities
There's a whole range of annuities you can buy. Once you've bought an annuity, you usually can't change your mind afterwards. So make sure you find the right one for you.
The two annuity types: Conventional or investment-linked
Bells and whistles
The third way - variable annuities
Alternatives to annuities
CHAPTER 3 - How to ensure you get the best rate
OK, so you've got an idea of the type of annuities that are available. Yet at this point, you still may be unable to decide which one is right for you.
It's also crucial to remember annuity rates change daily. There's no standard pricing, so if you're going to compare, you need to ensure it's fair and things haven't changed.
CHAPTER 4 - Other retirement income
Look at all your other potential sources of income, such as the state pension, savings, investments, insurance policies and benefits that could be used to boost your income.
How come it's free?
The guide is sponsored by retirement adviser Annuity Direct, but don't worry, it's had nothing to do with the content. That purely depends on our view of the best way to save money while buying your annuity, and the sponsor's view on that is irrelevant. The guide is written with complete editorial independence and purely focused on finding you the best deal, and this is enshrined in the contract.
Having said that, Annuity Direct isn't stupid. We always trumpet on about how getting independent financial advice is important for most people when getting an annuity, and Annuity Direct is one of the biggest specialist advice companies.
It sponsors the guide because it gets a one-time chance to include its own letter promoting its service when it mails out the guide. Just to assure you, you won't be sent any follow-up advertising, marketing or any of that malarkey.
In the trade this is known as a payment for ‘lead generation' and in this case that means Annuity Direct pays for the publishing, printing, posting and a fee to help this site.
See more about this site's ethical financial stance.
Are there any more guides?
Yep! As well as all the online guides on this site, we've a selection of special PDF downloads:
The Remortgage and Mortgage Guides
Teen Cash Class
Child Trust Funds