Shopping Around For An Annuity

Last updated: 03/01/2015

Once you've made decisions about your annuity options, you will be in the better position to start shopping around for an annuity.

Around about a month or so before your pension benefits become due, your existing pension provider will send you some annuity quotes.

Each provider varies, but generally, they'll post out a number of Single Life Annuity and Joint Life Annuity quotes.   

These annuity quotes are just examples for you to consider and will not be personalised to your exact requirements unless you have previously requested it.

Before you commit to buy, you have a right to take your time and look for a better annuity deal elsewhere. You are not obliged to accept any annuity offers from your existing pension provider.

Keep in mind that to be able to properly compare any annuity quotes, they should all be based on your specific annuity option requirements (i.e. quoted on a 'like for like' basis.)

All annuity providers set their annuity rates independently from each other. Some annuity providers offer much higher standard rates than others do.

To confuse matters even further, in addition to Standard Annuity Rates, some providers also offer even higher annuity rates called Impaired Life Annuity Rates, Enhanced Annuity Rates, Smoker Annuity Rates and Postcode Annuity Rates as well.



Standard Annuity Rates are plain and simple. They are the basic annuity rates offered to anyone that has qualifying pension funds and are mainly based on an applicant’s age and gender.

Impaired Life Annuity Rates are available to people who have a life threatening illness. In extreme cases, Impaired Life Annuity Rates can be as much as a 100% higher than Standard Annuity Rates. A higher income is paid to compensate for the applicant’s expected shorter lifespan.

Enhanced Annuity Rates are available to people who are expected to have a lifespan shorter than the national average. Factors that are taken into consideration are chronic health conditions (i.e. those that might reduce your lifespan but are not considered terminal), a history of smoking ten or more manufactured cigarettes a day, long-term regular consumption of excessive quantities of alcohol, long-term obesity or a history of working in an occupation that was hazardous for your health. Enhanced Annuity Rates can be as much as 30% (or more) higher than Standard Annuity Rates.

Postcode Annuity Rates are paid by some annuity providers to people who live in certain parts of the UK. These tend to be areas such as the North of England and the parts of Scotland where old heavy industries were based and whose inhabitants are known to have shorter lifespans than the national average. Postcode Annuity Rates can be as much as 10% higher than Standard Annuity Rates.

If you think that you may be eligible for Impaired Life Annuity Rates, Enhanced Annuity Rates or Postcode Annuity Rates as mentioned above, ask your existing provider if they offer any of them before you order your illustrations.

If you obtain annuity quotes from your existing pension provider based on your exact requirements, their figures will provide you with a yardstick to measure other annuity quotes against.

If your health is normal and you have a healthy lifestyle, finding a competitive standard annuity rate is not too difficult.



You will find a number of free standard rate annuity comparison tables on the Internet. The Financial Conduct Authority (FCA) and The Pensions Advisory Service (TPAS) have some unbiased examples on their websites.
However, you should note that annuity rates can fluctuate at any time and so the tables might not be completely accurate. In addition, they will not include every single annuity provider because some of them do not publish their annuity rates. If you want a more comprehensive list of annuity providers, you'll have to widen your search. Any comparison tables should therefore only be used as a general guideline.

Don't be surprised if you order an annuity quote and it comes back with different figures to those you saw quoted on a website.

Impaired Life and Enhanced Annuity Rates are subject to medical underwriting acceptance. This means that each provider will need a completed medical questionnaire from you before you can obtain a retirement illustration.

A group of leading annuity providers have created a Common Quotation Request Form for this purpose.

For more information, see:

Assuming that you've successfully carried out all of the necessary actions, you should end up with a fair wad of personalised annuity illustrations to sift through.

Once you have found an acceptable quotation and annuity provider, if you feel confident in what you are doing, you then move on to: Applying For An Annuity.

Don’t be surprised if all of this sounds a little daunting because it is.

It is probably the reason why around 60% of people don’t even bother to shop around for their annuity at retirement.

If it’s putting you off too, you don’t have to miss out on a higher retirement income.

All you need to do is talk to an independent pension adviser and they will do all the work for you.

They can also provide you with advice regarding the best annuity options for your personal circumstances, contact your existing pension provider on your behalf and do all the shopping around for your annuity.

In addition, they can also complete all the paperwork.

If you are at all unsure, don’t take any chances and don’t settle for less retirement income than you could get!

See the following for more information: Annuity Advice & Assistance