New research from Age UK Enterprises, part of Age UK, has shown that the message about shopping around for the best Annuity rate is still not getting through to many people.
The survey found that 31% of people who had already bought an Annuity, did not shop around for the best Annuity rate and that they were not told by their existing pension provider they might be able to get a higher income elsewhere.
Falling Annuity rates make shopping around more important
Over the past three years Annuity rates have fallen by around 20%, and by 7% over the past three months, making shopping around for the best rate even more important.
Retirement experts point out a number of things would-be retirees can do to make sure they get the best Annuity rate.
Firstly, retirees should always shop around for the best Annuity rates; using an online pension Annuity calculator is a good start.
Secondly, retirees should check whether they qualify for an Enhanced Annuity, which could give them a higher income by taking into account any health or lifestyle issues such as high blood pressure, diabetes or smoking. The Age UK survey found that around 40% of those surveyed were not aware that an Enhanced Annuity might give them a higher income.
Finally, using an Independent Financial Adviser (IFA) to arrange your Annuity may give you access to a wider choice of providers than are available directly to the public.
Pension providers must do more
Responding to the survey, industry experts called on pension providers to do more to make people aware that they could shop around for the best Annuity rate.
This survey makes it clear that the message is not getting through despite the Association of British Insurers (ABI) are putting plans in place to make it easier for retirees to shop around
Responding to the survey Managing Director of Age UK Enterprises, Gordon Morris, said: “This is a once in a lifetime purchase, so the industry as a whole has to do more to support customers and provide them with the information they need to pick the right product for their lifestyle and needs.”
Morris continued: “Shopping around for the right type of Annuity and the best rates is one way to enhance your income in later life.”
“No one should simply accept the Annuity offered by their pension provider; they should check first if other companies offer higher rates or a product that better suits their needs.”
Our team of Independent Financial Advisers in Nottingham are experienced in developing retirement income strategies for clients the length and breadth of the UK. If you are approaching retirement and would like advice on your options call one of our IFAs today on 0115 933 8433, alternatively enquire online or email firstname.lastname@example.org