- Shopping around for an annuity provider can increase a person’s income. In 2019, the Pensions Policy Institute calculates £130m could have been ‘lost’ in the first year by people not shopping around.
- Around £7,000 income per £100,000 pension value could be gained over retirement by shopping around.
- Industry prompts introduced in 2018 do not appear to have encouraged more people to shop around.
The Pensions Policy Institute (PPI) has found in one year alone (2019), somewhere up to £130m could have been ‘lost’ in annuity income from people simply failing to shop around for the best deal.
Commenting on the report findings, supported by Canada Life and Retirement Line, Nick Flynn, director of retirement income at Canada Life said:
“The annuity market is worth £4bn annually, and yet customers are not getting the most value from their pensions due to inertia or simply not understanding the importance of shopping around.
“Despite the introduction of pension freedoms and information prompts, the situation appears to be getting worse. People don’t know what they don’t know, and it isn’t simply about securing the best deal, it is equally important to buy the right shape annuity. Without professional assistance or advice, this is at best difficult.
“The PPI is right to shine the spotlight back on the market and start a debate. Just as the furlough scheme winds up, many thousands of over 55s will be considering their working futures. Many may find it hard to return to the workplace and seek the security of replacing their salary in retirement. An annuity is the only guarantee in town, so it’s important anyone considering their retirement options seeks guidance and advice to make the right decisions for their circumstances.”