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Cavendish Online has launched a unique annuity service to complement its already established Life and Investment services which have been MoneySavingExpert’s “Top Pick” for the last 8 years. We are committed to providing the cheapest route to buying your annuity without compromising the income you will get from the market leading companies.

Most annuity brokers will receive a commission of between 1% and 3% of the purchase price of the annuity from the insurance company. On a £50,000 pension this could represent £1,500. Using Cavendish Online you will only pay us an administration fee of £100, which will be collected from the commission received and the balance of the commission will be paid to you in the form of a CashBack without liability to tax*.

Some common questions about the quotation service provided by the internet:

Why don’t I go direct to my pension provider?

You will not be worse off by shopping around and the FCA is so concerned about the lack of retirees who do so that it is possible they may make it obligatory to do so in future. Since April 2013 all pension providers have to give the retiree the option to look at the whole of market, this will usually generate a greater income.

Why do income rates vary between brokers when the same insurance company has been recommended?

Commission paid by annuity companies can be between 1% and 3% depending on the level of activity between the insurance company and the annuity broker. On occasion the broker may rebate a small percentage of the commission in order to increase the annuity income. They are more likely to do this if you attempt to barter with the broker or invoke a “price promise” that they may offer. As a consequence a comparison between brokers is very difficult to make. This will not be case with Cavendish Online; we will offer a transparent comparison of the highest incomes available without distorting the figures and rebate the majority of the commission to you. In addition a small difference in the payment method (i.e.) arrears/advance can have an impact.

Why are some Insurance Companies not on the Cavendish Online system?

Cavendish Online’s system is very price competitive and we have made arrangements with the key providers in the marketplace to achieve a high quality instant online quotation system. Some companies do not wish to operate in this “open market” and transparent process and choose not to be on our quotation system. In our experience these tend to offer poorer value than the major players in the industry. Our system uses all of the principle players in the annuity market who would be considered “household” names and recognisable by the vast majority of customers.

Why do websites suggest that by shopping around you could get up to 60% more?

Most insurance companies will quote standard annuity rates; this can vary, depending on their market niche and their own underwriting vagaries, by as much as 25% from the highest to the lowest company. In addition, you may be eligible for an enhanced annuity if the insurance company were aware of your health and lifestyle, for example if you had high blood pressure, have suffered an illness even if historic, if you are a smoker, and these factors can uplift your income by up to 60% due to your reduced life expectancy. The only way to establish how your income will change is to complete a quotation via our online process.

*This represents our current understanding from HMRC and is subject to review by them.