What should I think about before buying an annuity?

25th July 2012

The purchase of a pension annuity can often be one of the most difficult and most stressful times in a person’s life – especially if they have no real idea about how an annuity works and don’t know where to start. There are so many different annuity options on the market that it can often be incredibly overwhelming to try and make a decision as to which annuity is the best and this can often lead to a hurried decision which can cause a person to lose thousands of pounds.

If you are in the market for an annuity then it’s definitely worth taking the time to shop around and consider your option, especially as it’s a long term investment and once your money has been invested you are often unable to withdraw that money or change your plan.

How can I decide between a joint or single annuity?

If you are single then this often isn’t a hard decision, but if you are in a relationship it can be a consideration that you have to make as to whether you are looking to take out an annuity option with your partner or as an individual. Joint annuities can offer you the peace of mind knowing that your partner would be covered in the event of an unexpected death but unfortunately they can present a lower annuity income, especially if one partner is younger or in better health than the other partner.

In some situations it could be worth weighing out the annuity income amounts for both a single an joint annuity and working out which is better suited to your situation.

How can shopping around for an annuity help me?

If you are going to make an important decision such as choosing an annuity then it’s important that you don’t just take the first one that you see – take the time to shop around and have a look at what is available on the market. You might find that there are a number of different options available to meet your needs and that they could save you a great deal of money in the future.

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