The idea of an annuity is simple and attractive. You save during your working life. You accumulate a pot of cash. When you retire, you take that cash to an insurance company and swap it for a guaranteed stream of income (the annuity). This will be paid to you every year or month until you die.

Unfortunately, as the Sunday Times points out, the system isn’t working due to “bad practice and unfair regulations”. Insurers don’t make it clear to retirees just how many options they have when they come to take their pension. As a result, 40% of us fail to shop around for the best annuity. At the same time costs and commissions are horribly unclear. On-line brokers look free, but they aren’t really.

So what do you do?

If you want an annuity, the only answer is to shop around and get the best one possible. If that’s not possible for you let a reputable financial advisor or planner do the leg work for you. If you have or have had health problems definitely seek advice as the sicker you’ve been the more you’ll get. High Blood Pressure alone might just do the trick.
In summary, buying an annuity is a once in life time choice that you don’t want to get wrong. Don’t be afraid to ask for help.