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The Cost Of Delay

Once you've decided which annuity to buy and from which provider, we will help you through the process of getting your pension fund to the right place.


But buying an annuity is very "rate dependant" which means your annuity income is calculated using the rate that applies when your pension fund is ready to buy (with the annuity provider) unless you are still in your guarantee period.


Delays can affect your annuity rate and/or the number of payments you receive (however you choose to receive them - monthly, annually, etc).



Annuity rates have been falling over recent months (and even years) and this might make you think about delaying buying an annuity until rates improve.


Of course, the majority of people can't afford to wait as their annuity payments will be their main or sole income in their retirement.


If you do wait for (say) two years you would expect a higher annuity even if rates stay the same because you are two years older. The older you are the less time the providers estimate you'll live for and so the higher the rate they'll pay. And if rates do improve then your pension is boosted even further.


But if rates stay the same you will have missed out on the next two years income and compared to your eventual (increased) annuity this missed amount would take years to get back.


It would take a significant increase in annuity rates over the next two years to justify a decision to wait.


Before You Buy.

After You've Bought.

Once you decide to buy you need to be aware that the rate you're quoted is only guaranteed for a certain length of time; usually between two and four weeks from the issue date.


So, if you like the quotation you've received, you need to complete your paperwork and submit it as soon as you can. This gives us and the providers the best chance of completing (buying) your annuity on the rates quoted.


We can help you by identifying ORIGO providers and/or providers that are well known for their quick (or slow!) completion times.


You can help by telling us if receiving your first annuity payment (and/or tax free cash) is particularly important to you.

And Finally...

The actual buying of an annuity isn't difficult; it's merely transferring your pension fund from your existing insurance company to your new one - your annuity provider.


But it is very time sensitive which means the process has to be quick and you need to be aware that once you've decided, we have to get the money across as soon as possible.


If you need an income in retirement now then talk of waiting until rates improve means little. Once you've decided which annuity is right for you and we've identified the best company - don't delay.


If you aren't sure now is the right time to buy be aware of the risks of waiting and consider the alternatives.


And if you decide you need advice through all this - contact us.

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