Statistics reveal that nearly two-thirds of the persons retiring in the United Kingdom had been accepting low annuity income schemes from their individual pension providers. They had never realised that the option of selecting an open market option will increase their monthly income by as much as 30% maximum, depending on the type of the open market option. This lack of knowledge about how annuity rates work and the process of obtaining the best annuity rates had resulted in a loss of thousands of pounds to such people every year until they are alive. Such people had not thought of enquiring around about annuity rates and analysed the various pension annuity schemes that could have fetched them appreciably higher monthly incomes.

As such, it is highly important to consider the various pension annuity schemes and options available to a person and select the right pension income scheme that offers the best annuity rates. This is due to the reason that the pension annuity cannot be changed to a different type or the provider cannot be switched. Once purchased, the pension annuity will remain unaltered for the rest of the life of the retiree. Hence, all the possibilities of obtaining an enhanced annuity scheme or other types of impaired annuity schemes should be thoroughly explored before taking a decision on the pension annuity purchase and the annuity rates offered by the various providers.

According to the UK pension annuity laws, when an annuitant receives special advice from an authorised Independent Financial Adviser (IFA) that is part of a registered annuity and pension bureau, the annuitant is protected by the consumer laws if the advice of the IFA is found to be inappropriate. Hence, when you approach the IFA, you should discuss in detail about the options and features offered by the various providers and the benefits and demerits of each pension annuity scheme. If you do not understand terms like phased retirement, income drawdown, etc. you should specifically ask for clear explanations about their advantages and drawbacks from the IFA. This way, you will be able to ensure that you get the best annuity rates, with maximum monthly annuity income for the rest of your life.

According to available statistics, the present annuity rates in the United Kingdom are the lowest in the last 40 years. This should not make you think that the annuity rates will not increase in the near future, when the economy becomes more vibrant. The annuity rates and the resultant pension income from the purchased annuity are depended on several subtle and key economic factors. Economists are of the opinion that the annuity rates can only remain at present levels or even decrease further in future, with no possibility of any increase. That is why you should spend sufficient time to compare the various pension annuity quotes and decide on the best annuity rates before purchasing the annuity.

Since the insurance companies offering pension annuity schemes invest the money in government gilts and investments, the changes in inflation rates will reduce the yields from their investments. This factor will influence the insurance companies when they offer annuity rates. Since perceptions will vary from one insurance company to another, the annuity rates will also vary. It is advisable to shop for the best annuity rates to maximise the monthly annuity income.