At times there can be only two or three who are competitive. So the first thing to mention when looking at buying an annuity is choose your moment carefully.

You don’t have to buy an annuity to take income from your pension. You can just draw from it and wait a while before buying an annuity.

But if you have looked at all your options and have decided that buying an annuity now is the right thing to do, then here is how to find the best rate.

Find a specialist annuity broker who can get you rates from the whole of the market. If the broker doesn’t make it very clear up front that they are whole of market, then the chances are that they aren’t. Surprisingly, some of the largest household names offer annuities from only a restricted choice of the market.

You can obtain whole of market annuity quotes free of charge from many different firms including

Annuity Direct, Better Retirement Group, Annuity Bureau to name but three of the better known firms.

Not every annuity firm quotes rates online so whilst using the web comparison tool can give you most rates, it can’t give you all the rates. So pick up the telephone and ask a whole of market firm to search for you.

Make sure you get an accurate like for like comparison between your pension policy and the best the open market can offer. Beware of the small print trap. One in seven customers has something in the small print of their existing scheme that makes a straightforward purchase on headline rates more complex.

Disclosing your medical and lifestyle information in full can only help you get a better rate. An annuity is your own money repaid to you for life plus some interest. The more poorly you are then the more money an insurer is prepared to give you each year as they don’t expect you to live very long.

Do not ever purchase an annuity online if you have medical conditions because the best rates aren’t online.

Also, beware of ‘indicative’ rates quoted online. These are often inflated rates intended to draw you in to an insurer who then asks you more medical questions and then gives you the correct (lower) rate later on.

Working with a whole of market broker or adviser, you can complete all the required questions in one go and the broker obtains the best quotes from all the insurers, including haggling on your behalf.

Finally, once you have the best rate, you need to get the paperwork moved quickly as the rates change often and your rate could expire if there’s any delay. A good broker will help you get the paperwork right first time.

Alan Higham is chief executive of Annuity Direct