Converting your hard earned pensions savings in to an annuity at retirement is anything but simple. Get it wrong and it could cost you thousands of pounds throughout your retirement, and so taking expert advice at the point of no return is a priority.

Accessing advice where you only have a small pot is another matter. Some advisers are unwilling to help on smaller pensions, as the amount of work involved can be substantial regardless of the amount of pension savings in question. Advisers may be reluctant to provide advice on pots of less than £50,000 although others will do so where this is part of a client’s portfolio.

Advice may be available at a price, which could include a fee or commission or a combination of the two depending on individual circumstances. However your lifetime pension could benefit by an enhancement of 20% to 30%, and more where health factors are taken in to account. This represents a tidy sum over the period of retirement and could make the initial cost of the advice seem a bargain.

There are some excellent annuity sites that will provide you with an indication of the amount of pension you could expect. The quote facility allows for a number of different permutations in how your pension is paid, including a level or an increasing payment, a guarantee period and based on single or joint basis. These provider tools make a good starting point to build your knowledge of the options available and also provide access to further help and guidance when you need to turn knowledge in to action.

The following are links to some tried and tested annuity services with access to quote tools:

The Annuity Bureau – http://www.annuitybureau.co.uk/

Annuity Direct – http://www.annuitydirect.co.uk/

Better Retirement Group – http://www.betteradvice.co.uk/annuity

Hargreaves Lansdown – http://www.hl.co.uk/pensions/annuities

Enhanced rates

This is not the time to be shy about being a smoker or taking medication due to a health problem. You need to ensure that the annuity provider has all of the information on any health matters that could mean you receive an enhanced pension rather than standard terms, such as for high blood pressure or high cholesterol, even if this is under control with medication.

The number of people who are thought to qualify for an enhanced rate is about 40-60% and the market is rapidly growing. Surprisingly many retirees with limited resources are reluctant to spend the extra effort to obtain enhanced terms and a potential increase in their retirement income of £10-20 per month. They should be aware that an apparently minor increase on a small pension pot can make a very significant difference over time and can add up to thousands of pounds.

To obtain the best rate on your small pension pot you should:

• Take time to consider all of your options.
• Ensure you consider health/smoking factors.
• Research the options available and ask questions.
• Obtain some personalised quotes.
• Contact a Financial Adviser who provides a service on small pension pots.