Improve your retirement income
What steps you can take to improve your retirement income?
24 August 2012: If you are within a year or so of when you planned to retire and you have seen your fund value reduce, waiting until markets recover in the hope that the value of your pension pot improves might seem like a sensible option. However if your pension remains invested there is no guarantee that in one or two years time your funds will increase, nor is there any guarantee that annuity rates will be higher.
So what steps can you take now to improve your retirement income?
When you retire, your pension pot - minus any amount you may choose to receive as a cash lump sum - can be converted into an annuity to give you a guaranteed retirement income for the rest of your life. How much you get will depend on the size of your pension pot, the annuity rates available and also factors that determine your life expectancy.
Maximise your hard earned pension by shopping around
As with most things, it pays to shop around. With an annuity you don’t just have to accept the offer made by your pension provider; in fact you have a legal right to shop around. Annuity rates may vary between providers and there could be significant differences between the best and worst annuity – sometimes by hundreds of pounds a year. In fact it’s not uncommon for some providers to pay up to 20% more income per year. When we consider that we could have many years of retirement ahead of us, this could significantly add up.
It is important to make the right decision now, because you cannot reverse it later.
An annuity determines your income for the rest of your life and so could affect your long-term retirement plans. A research report released in February by the National Association of Pension Funds and the Pensions Institute estimates ’each annual cohort of pensioners loses in total around £500m-£1bn in potential lifetime income by making the wrong decisions, so it’s not a decision that should be taken lightly.
The Nationwide Annuity Service
The Nationwide Annuity Service can help make it easy to shop around to get the highest retirement income possible. That’s because we’ve selected a panel of annuity providers with a pedigree for offering consistent and competitive annuity rates, the right approach to customer service and strong financial stability. If you’re looking to retire or access your pension fund within the next year or so, our Senior Financial Consultants can discuss with you the different types of annuity options that might suit your circumstances, for example they can discuss with you how to:
- Provide an income for your partner if you wish
- Earn a higher income with an enhanced annuity if you have a health condition such as high blood pressure
- Combine multiple pension pots into one annuity
Listen to Nationwide’s head of protection and investments, John Wilkinson talk about Nationwide’s Annuity Service.
If you would like to learn more about how Nationwide can help you plan for your retirement, please go to nationwide.co.uk/annuities or call 0800 028 6039 to book an appointment with your local branch.
The Nationwide Annuity Service is provided by Nationwide Building Society and administered by The Open Market Annuity Service (TOMAS), which is a specialist business that helps people make the most of their pension savings. The Nationwide Annuity Service panel of annuity providers are Aviva, Canada Life, Just Retirement, Legal & General, LV= and Partnership Life Assurance. Nationwide Building society is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) or Prudential Regulation Authority, under registration number 106078. Nationwide Building Society Head office: Nationwide House, Piper’s Way, Swindon, SN38 1NW. The Open Market Annuity Service Limited is an appointed representative of Just Retirement Solutions Limited which is authorised and regulated by the Financial Conduct Authority under registration number 455713.