Almost 80% of people approaching retirement risk losing out on thousands of pounds by not shopping around for the best annuity rate.
The warning comes after research by Partnership revealed that the vast majority (76%) of people nearing retirement believe that remaining with their current provider will 'make no difference' to the amount of money they receive in retirement through an annuity.
Additionally, only 17% understood that if they smoked, were overweight or had high cholesterol they could potentially receive even more by taking out an enhanced annuity.
Research by Moneyfacts.co.uk drives home the importance of researching the market thoroughly prior to committing to an annuity, with figures showing that a retiree aged 65 years old looking to purchase a standard level without guarantee annuity could increase their annual income by an average of 11.6% by opting for the highest paying provider rather than the lowest.
Those taking out an enhanced annuity, meanwhile, could increase their income by as much as 16.9% on average compared to taking out a standard annuity.
"This research suggests that we need to work harder as an industry to encourage people to actively consider their options rather than simply taking what is offered," said Andrew Megson, managing director of retirement at Partnership.
"Whether people choose to speak to various providers themselves, work with an intermediary or use a comparison service is their choice but it is vital that they do something or risk receiving significantly less than they hoped."
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