Pensioners need to receive a regular income once they have retired and it can prove difficult to manage a large sum of money for a long time. This is why annuities are used to split the pension into a fixed and regular income. The majority of people decide to stay with their current pension provider without shopping around to find the best annuity rates, however this can result in a loss of potential income as when time is taken to compare the different annuity providers, many pensioners can find a 30% increase in income is possible.

A pension provider will get in touch with a retiree once the retirement has been formally arranged to provide details on the size of the fund available and what their annuity package will consist of. The information provided is a guide to what income a retiree can receive through their life and is more accurate the closer to retirement it is.

Everyone that is about to retire has the right to shop around and compare other annuity providers and thanks to the development of the annuity industry, it is easier than ever to transfer a pension fund from one company to another.

Most pension companies will only provide their standard rates to people that have formalised their retirement as this is the most profitable to their business, however with the open market option going to a number of annuity providers helps to find the best rates possible. It may also be possible to go back to the current pension provider to find out if they can offer a better deal.

Even though the open market option exists, many annuity providers still do not deal with consumers directly. For this reason many pensioners will use the services of a specialist annuity advisor. Annuity advisors will take the details of a pension and find the best annuity rate from a number of providers, saving the pensioner a significant amount of time.

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