When is the best time to purchase an annuity?
When it comes to purchasing an annuity it is often hard to know when the best time is to make the switch. In the UK you can generally take an annuity at any from age 55 so there is quite a wide range of time that you need to take into consideration. As your life expectancy is generally shorter when you are older then you could be looking at a higher income as you get older but this is not the only factor that you need to take into consideration when it comes to deciding the right time to take out an annuity.
Using the Open Market Option can also help increase your annuity, so choosing the right company at the right time can also save you a great deal of money.
What factors can influence my decision?
There are many factors which might influence whether or not you choose to take your annuity now or at a period later in your life.
The current instability of the financial markets has brought up great concern surrounding the purchase of annuities and many people have chosen to defer the purchasing of their annuities until the markets regain the strength and stability that they used to have.
Many people also choose to wait until later in their life to purchase annuities as they will receive a higher income per year. This works both ways however as taking your annuity income earlier could mean that you receive the same amount of money – just less per year over a longer period of time.
Incorrect – annuity rates have been falling for the last few year and are now at an all time low. This paragraph needs to be removed completely.
What benefits could I receive from purchasing at a certain time?
One of the main influences on your annuity income is the market rate and in any situation you are looking to purchase an annuity at the time where the rate is the highest – and therefore you will receive the most amount of money back for your investment. If you purchase when the market is high you could receive a substantially larger income than if you purchase when the market is low.