Why We Don't Have Calculators or Rate Tables on Pension Annuities Plus...

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THE ARGUMENT AGAINST PENSION ANNUITY RATE TABLES AND RATES CALCULATORS

You may already have visited other annuity information sites and used a rates calculator or consulted a rate table.

• Were you sure that the information was not out of date?

• Does the table or calculator take into account all of the products on the market or just a selection?

• Did you know that independent annuity brokers may have access to a wider range of retirement annuity possibilities?

• Was it an illustration rather than an individual quote?

• Does the website promote particular providers over others as they are paid higher commissions by some?

• Are the annuity providers able to pay to list their products higher up the tables, or to have their products shown in a different way?

• Did you know that the annuity rates may change before your application goes through? If you received a quote, was it guaranteed by the website?

UPDATED BY MACHINES OR HUMANS?

Did those sites use 'screen-scraping' technology that retrieves and transfers information from other programmes?

According to Wikipedia, "Screen scraping is generally considered an ad-hoc, inelegant technique, often used only as a "last resort" when no other mechanism is available. Aside from the higher programming and processing overhead, output displays intended for human consumption often change structure frequently. Humans can cope with this easily, but computer programs will often crash or produce incorrect results."

BUT THE WEBSITE STATED IT HAD BEEN RECENTLY UPDATED

Even if the table or calculator was 100% up to date and correct, were you aware that the stated annuity rates may have no resemblance whatsoever to the income that you will actually achieve? This is because your annuity may increase due to your circumstances, i.e. your state of health, medication that you may be taking and whether you're a smoker or not. Some providers even base your future income on your previous occupation or postcode.

Again, let's say you do find a site where everything is up to date and works correctly; do you know at this stage whether you want a level, a fixed-rate escalating or an rpi-linked escalating annuity? Additionally, have you considered your partner's or dependent's percentage on your death? Have you considered an unsecured pension? The choices are often bewildering.

WHAT DOES THE FSA SAY ABOUT COMPARISON SITES?

Comparison sites have been heavily criticised in the media and by the FSA, the UK financial regulator, for their lack of independence and incomplete information. Consumers often don't realise that they're not getting the complete picture.

The FSA (Money Made Clear) say "Some may only include products that the website can make money from in some way, for example if you click through to the provider." They also state that you should never buy a product just on the basis of what you see on their own tables. They recommend getting advice before using their tables.

(Please note that the information on this page does not represent financial advice. You must consult a broker for complete information. "The argument against annuity rate tables and calculators" is an opinion only and you should not rely on this information to make (or refrain from making) any decisions.)

Helping to Boost Your Income

The things your pension annuity broker will look at include:

• Your required annuity income
• Any spouse or dependants' benefits
• Your previous occupations
• The type of area where you live
• Your attitude to risk
• Security versus flexibility
• Other assets you may have

...and importantly...

• Your health

Have you ever been hospitalised for any medical condition? Your broker will also ask if you are currently taking any medication - did you know there are over 1,500 health conditions that could result in an increased pension annuity? You may qualify for what is known as an Enhanced Annuity (sometimes known as an Impaired Life Annuity).

Additionally, higher pension annuities are often offered to:

• Regular smokers

• People who have retired from certain occupations

• People who live in certain parts of the country

Due to the range of the pension annuity policies that financial advisers can offer, we cannot provide online quotations, only personalised comparisons.

An FSA registered financial adviser (not a call centre) will contact you to discuss your exact requirements and formulate a tailored pension annuity proposal for your circumstances. There is no charge for us investigating your policy and you are under no obligation to follow any recommendations that are made.

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