Last year around 30,000 retirees could have got an average of £4,000 more over the course of their retirement by switching annuity provider, according to new research.
Number-crunching carried out by the Pensions Policy Institue in association with LV= found that failing to shop around cost buyers £30,000 in lost income, which works out at roughly £4,000 per annuity buyer.
The findings follow a study published today (12 June) by the Financial Conduct Authority (FCA), which looked into how the retirement income market is changing since the pension freedoms. The City watchdog found that consumers who access their pots early without taking advice, tend to follow the ‘path of least resistance’, which means they accept drawdown from their current pension provider without shopping around.
Previous research supports these findings, for example Citizens Advice found that seven in 10 people who have accessed their pensions since the new freedoms were introduced did not shop around for different products – which can make a crucial difference to how far their retirement income will go.
John Perks, managing director of Life and Pensions at LV=, says: ‘Last year alone consumers missed out on a staggering £130 million over their retirement by sticking with the same provider when taking out an annuity.
‘This is echoed across the retirement space with consumers failing to access the best retirement products. People are expecting their pension pot to stretch even further nowadays so it’s crucial they take control and get support to help them get the most from their savings.’
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