#23 Don't forget to shop around

by Jane Baker on 26 August 2009  |  0 comments
Tweet

Today's 'what not to do with money' rule is what lovemoney.com is all about.

Today's 'what not to do with money' rule is what lovemoney.com is all about.

#23 Don't forget to shop around

Earlier today I wrote an article about annuities. For once I managed to keep my usual banging on about shopping around down to a minimum, even though comparing annuity rates before you buy is one of the best things you can do for your pension.

But while I did my research, I couldn't help but notice just how much difference there is between the rates on offer at the best and worst providers.

For example, the current rates today range from 5.71% to 6.89%. That means if you had a pension pot of £100,000 and you were unfortunate enough to choose the least competitive one, you'd get an annual income of about £5,710.

But if you shopped around and chose the best annuity rate instead, your yearly income would jump up to £6,890. That means you'd be £1,180 better off every single year for the rest of your life.

And if your annuity paid out for say, 20 years, the extra income you'd get would amount to a massive £23,600!

That's certainly worth comparing the market, isn't it?

And don't forget, not only does this rule apply to annuities, but keep it in mind when you buy just about any other financial product too.