Annuities Made Simple: Explaining The Open Market Option

The on-set of retirement is a time to relish, not dread. Yet for many the preparation for this period of life can be one of anxiety, filled with stress over which annuity option to choose and whether or not it will provide for much anticipated retirement plans. Whilst it may seem easier to buy your annuity from your current pension provider, the financial benefits of doing so may be minimal in comparison to the gains you could be receiving through exploring the Open Market Option.

Allowing you to ‘shop around’ for the best deal, the Open Market Option gives you the opportunity to convert your pension pot into an annuity specifically tailored around your lifestyle, financial goals and future plans, not to mention the opportunity to gain 20% more in monthly income. And whilst shopping around may seem a daunting task, talking to an Independent Financial Advisor is an easy and often invaluable means of gaining a greater understanding and impartial advice on the best options available to you.

A significant benefit of using the Open Market Option is that the rates offered are devised specifically with your personal circumstances in mind, therefore offering more appropriate rates and income plans than those offered through standard pension plans.

Impaired Life Annuity

Based on your individual circumstances, Impaired Life Annuity provides a tailored annuity based on medical history and offers rates rarely matched by standard pension plans as a consequence. Ensuring valuable extra income often vital in funding medical treatment or support during retirement, this option is beneficial to those who suffer from long-term conditions such as diabetes and high-blood pressure, in addition to serious illnesses such as cancer.

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Enhanced Annuity

Taking into consideration lifestyle choices such as smoking, alcohol consumption and weight, this option pays an annuity rate decided in regards to your life expectancy – meaning you could receive a high rate of income over a shorter period of time in comparison to that offered by your current provider.

Joint Life Annuity

Allowing you to live for today whilst ensuring the future comfort of your loved ones and dependents after your death, the Joint Life Annuity option guarantees a stable income for the remainder of your chosen recipients life. Unlike life insurance, this option allows you to provide for those you care about over an extended period of time after your death, in addition to gaining personally during your retirement  offering both immediate and long-term financial benefits.

With Profit Annuity

Much like other investment schemes the return on your pension investment is paid over a period of time – ‘smoothed out’ over this period to guarantee a fairly stable rate of return and allowing for fluctuations in the market which would otherwise damage income levels. Whilst risker than many options due to their reliance on an anticipated bonus rate, with-profit schemes can offer lucrative returns and many now offer a minimum guaranteed investment regardless of investment growth.

These examples of annuity options available through the Open Market Option reveal the various financial benefits you can reap from shopping around, abandoning the ‘one size fits all’ mentality towards pensions and seeking independent advice. But most importantly, only through exploring the open market will you locate a pension guaranteed to suit your needs and therefore provide the piece of mind vital to enjoying retirement to the full.

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