‘Illogical’ retirees won’t shop around for annuity - Annuities - News - Moneyfacts

News

‘Illogical’ retirees won’t shop around for annuity

‘Illogical’ retirees won’t shop around for annuity

Category: Annuities

Updated: 20/06/2013
First Published: 22/10/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

It is thought thousands of people are missing out on a better retirement income because of an illogical approach to shopping around for the best deals.

While people are happy to compare prices for routine items like food and holidays, it appears that the same logic is not always applied to annuities.

A recent survey by Aviva found that, on average, UK adults will spend 42 hours a year shopping around for a holiday and 32 hours comparing prices on food and drink.

However, the money which they save on these purchases pales into insignificance when compared with the thousands of pounds extra income that they could receive over the course of a lifetime by finding the best annuity.

Yet more than 40% of those questioned said they do not spend any time comparing deals from annuity providers, a staggering amount of people given how easy it can be to shop around for the best annuity.

An online annuity planner service, such as that offered by Premier Retirement Services, is an ideal way to start a search for the best annuity deals, while our annuity best buy charts compare the annuity rates on offer from some of the leading annuity providers.

"By not shopping around for an annuity, people could miss out on extra income during their retirement, which could last thirty years or more," said Clive Bolton, 'at retirement' director for Aviva.

"It has never been easier to shop around for a pension income and the rewards gained will almost certainly outweigh the time spent doing so."

Benjamin Fry, a consumer behaviorist, said that unfortunately, for many, annuities were still 'a black-hole which they feel ill-equipped to understand or to venture into'.

"That's why some people just go with the first idea presented to them," he added.

"With clearer information, those approaching retirement may become more motivated to take control and then shop around, ultimately getting better value."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Want an annuity? Your provider will help you pick

Buying an annuity can be fraught with difficulty, but what if you still want a guaranteed income? The regulator is stepping in, so it should soon be easier to find the annuity that meets your needs – because your provider is going to help.

Annuity rates rally after tough few months

Good news for those seeking a secure income in retirement: our latest analysis has revealed that annuity rates are staging a mini revival after suffering from heavy falls in recent months, so you’ll now be able to get slightly more from your savings.

Secondary annuity market scrapped

The Government is cancelling plans for a secondary annuity market, citing concerns about consumer protection. Given there were fears that many could be ripped off – and that it wouldn’t be right for most – the decision has been largely welcomed.
 
Close