Tag Archives: Open Market Option

Before you Buy an Annuity do your research!

What is the definition of procurement? To procure something is to plan and research its purchase, examine the product in all its aspects and to find the appropriate product that meets all the demands and needs of the buyer. As such, to procure can simply mean to buy, but with a far more analytical approach. When you buy an annuity, you are making an important decision that will affect your income during the rest of your life. An annuity once purchased cannot be reversed, and so buying an annuity is a decision that should be treated with some seriousness.

We may not realise it, but whenever we do buy something we are, in fact, procuring it. First of all we analyse our requirements, we try to understand what we need and why, next we determine a budget, consider different options, think about long term prospects and lasting power of the different options and then finally, make the purchase.

Therefore, don’t simply buy an Annuity; rather, look at it as procurement. After all, an annuity is not like purchasing an electric kettle or a pair of pillow covers. It is something that plays a significant role in retirement income; will have a huge impact on your financial security during retirement; and therefore has implications for the quality of the rest of your life.

When it is time to buy an annuity, pensioners have the right to explore the open market and shop around for the best annuity. This is known as the open market option. Despite this, a large proportion of people do not exercise this right and simply commit to the first annuity deal that is offered to them by their pension provider. Many people do not offer the same time and effort when they buy an annuity that they would to buying something far more insignificant!

Research has shown that shopping around for the best annuity is one of the most important steps in ensuring that you maximise your pension savings during retirement. Indeed, recent figures show that using the open market option to look for the best annuity deal could mean getting up to 46% more income during retirement. Not only that – shopping around also makes you aware of the different types of annuities available on the market so that you can choose one that truly suits your individual needs. Procurement involves reading reviews, understanding different options, shopping around, negotiating with sellers and finally, making a commitment to buy the product that best suits your requirements. These very same principles must be applied when you buy an annuity.

Is an Independent Financial Adviser Necessary for an Impaired Annuity?

Many consumers choose to do a great deal of independent research on potential investment strategies once it is time for them to start thinking about their retirement years. All consumers should be doing this kind of research on their own. However, many consumers forget to seek out the independent annuity advice of more seasoned experts in the field. While every consumer should do their own research, that research should be partnered with the expertise and independent annuity advice of an independent financial adviser. There are several reasons for this.

Benefits of Using an Independent Financial Adviser

There are several unique benefits to seeking out the advice of an independent financial adviser. First, and most obviously, an independent financial adviser (IFA) simply knows more about impaired annuities and all annuities in general, than the average consumer. They truly have the independent annuity advice that consumers need in order to invest smartly.

Secondly, independent financial advisers have access to the entire annuity market. This means that they are able to use their knowledge, partnered with what is available in the current market, to better give their consumers educated and independent annuity advice. This means that they are able to get some pieces of information that wouldn’t even be easily accessible by the average consumer. They are able to use that information to better advice consumers who are looking to purchase annuities.

The third benefit of receiving independent annuity advice from an expert in the field is that the expert is most likely going to be able to find better rates than the average consumer. This is almost guaranteed if the consumer is simply going direct and not using the open market option to find the best deals and rates for their annuity purchase. Using the independent annuity advice of an expert can help the consumer to find the best rates and deals available in the current market.

Lastly, and most importantly and simply, by seeking out an independent financial adviser, the consumer can rest assured that the independent annuity advice they are receiving is worthwhile. They can be more secure and stable in their decision making and can be comfortable knowing that they received the best advice they could in order to make their decision. Receiving independent annuity advice can make a consumer far more comfortable determining what annuity they will purchase, if any.