Many retirees could be missing on a significant sum of money by not considering the full range of annuity options available to them, new research has revealed.
More than a quarter of a million people a year could get a better pension using the open market option to purchase an annuity,according to Saga Personal Finance.
However, the vast majority simply take whatever is offered by their pension provider, with only 40% opting to evaluate their options elsewhere.
As a result, it is estimated that someone with an average pension pot could be missing out on around £300 each and every year of their retirement.
Interestingly, Saga says that the over 50s are willing to go to great lengths to be £300 a year better off: 37% said they would drive an extra 15 minutes to get to a cheaper supermarket, the equivalent of 13 hours a year.
Yet the majority of people taking out an annuity do not invest the time to shop around.
"For too long middle Britain has been doing the right thing and saving for their retirement; but then at the final hurdle many miss out on the best deals when they come to buy their annuity and are left out of pocket for the rest of their lives," said Andrew Goodsell, executive chairman, Saga Group.
"This is a locked-in-for-life decision and too many people are missing out. More should be done by companies and the regulator to ensure that people take up the open market option."
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