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Are you getting the pension you deserve?


1st Jan 2015 Pensions & Retirement

Are you getting the pension you deserve?
It's many people's biggest fear—getting to retirement and realising there's not as much in the pot as you thought. Here's how to make sure you're getting the pension you deserve. 

When interest rates are low, so are annuity rates

annuity rates
Imagine: you save all your life for retirement and then when you finally get there, you realise that the pension or annuity your money will buy you is barely enough to cover the essentials.
Unfortunately, this is more and more common today in the UK. Annuity rates are linked to interest rates and when interest rates are low, so are annuity rates. We have never had a period in our history when annuity rates are lower than they are today.
A pensioner of 65 with a fund of £100,000 after tax-free cash will today get a base pension of circa £5800 (according to This is significantly less than a few years ago when annuity rates were higher.

Most of us don’t choose when we retire

Yet the date you buy your annuity can have a dramatic effect on the income you receive in retirement.
There are ways of delaying the buying of an annuity, but these are often complicated and usually require expert (and often expensive) advice. Where possible speak to an expert, because even in times of low-interest rates, the difference between a good annuity rate and a bad one can be dramatic.
Even if you bought the annuity at the right time, the industry has been littered with at best poor advice and at worst deliberate miss selling. In particular many thousands of customers have been given annuities that don’t take into account their health conditions.
In the annuity business, angina, diabetes, smoking and many other health conditions work in your favour, as you should be entitled to a better rate.
Since 2008, more than 600,000 people in the UK alone are believed to have been affected by this issue and are now receiving a pension less than they should have got*.
Someone who was overweight and smoked could potentially be receiving a pension of £2000 more per year for his or her £100,000. This is for life and adds up to an enormous difference to the value of their pension income.

The good news…

happy couple
If you have been given poor advice or have been put in an annuity that is not right for you there is something you can do about it. Even if all you want is the peace of mind of knowing that the advice you got was right then it’s worth having a conversation with an expert.
This is a complicated field and the companies themselves will often have a vested interest in telling the answer that suits them.
If you need expert advice or help and support with your pension and retirement planning from a trustworthy source, contact Unbiased today.
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*The Telegraph, March 2015
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