It has never been a more important time to shop around for the best annuity deal, with average annuity incomes falling dramatically.
According to research by Investment Life & Pensions Moneyfacts, the average standard annuity income for a 65-year-old male dropped by 11.5% in 2012, reflecting the biggest annual fall since 1998, when annuity income fell by an average of 13.7%.
The most competitive annual annuity income, based on a £50,000 pension pot for a standard level annuity without guarantee for a 65-year-old, is £2,841. In comparison, the least competitive stands at £2,444 highlighting a £355 difference.
Richard Eagling, head of pensions at Moneyfacts, believes that searching the market is key to finding the best annuity plan. "The extent of the detriment that consumers may face as a result of not shopping around when purchasing an annuity may surprise many who automatically assume that the difference may be negligible on the basis that the underlying product is the same," he said.
"Ensuring fair pricing is absolutely vital given that the number of people who will need to buy an annuity to provide an income for life is forecast to rise steeply over the coming years."
The Financial Services Authority (FSA) is in the process of investigating the way in which annuity products are sold to ensure consumers are provided with sufficient information and are encouraged to shop around.
Learn about your annuity options
For help compare annuity quotes online or call the Moneyfacts Annuity Service: 01737 233435
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 Any products featured may be withdrawn by their provider or changed at any time.
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