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Shop around for best annuity or risk losing out

Shop around for best annuity or risk losing out

Category: Annuities

Updated: 13/03/2013
First Published: 13/03/2013

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 It is now over 6 months old so the content may be out of date.

Annuity customers could be losing out on up to £750 million by failing to 'shop around' for the best deal, according to the UK's largest insurer.

Aviva claims that all providers should offer equal annuity rates to both internal customers, ie those who prefer to take out all their pension savings products with the same provider, and those who choose to use the 'open market option', classed as external customers.

Research last month by Investment Life & Pensions Moneyfacts revealed the extent of the problems facing retirees, with annuity rates continuing to fall significantly over recent years.

The average income for a 65-year-old male has reduced by a massive 56% since August 1994, with annuity incomes decreasing in 15 out of 18 calendar years.

The figures drive home the importance of researching the market thoroughly prior to committing to a plan, and consulting with an independent financial adviser to discuss retirement savings options.

Chief executive of Aviva's life arm, David Barral, said: "We have long championed the open market option.

"Quite frankly, some of the differences in rates are nothing short of scandalous and the market will only be right for customers when providers are clear and transparent about the rates they are offering."

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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 Any products featured may be withdrawn by their provider or changed at any time.