A new report conducted by the NAPF – National Association of Pension Funds says that upto £1bn of retirement income is lost each year because of the way annuities are sold in the UK. They described the current system has ‘hugely unfair and opaque‘ and accused annuity providers of ‘sharp practice and murky pricing‘. When reaching retirement those who pay into a defined contributions pension scheme face a number of options. Most convert their pension pot into an annuity, which pays an income each year for the whole of their retirement. However, not all providers offer the same products and rates, which is why it is vital to shop around for the best deal, known as using the Open Marker Option. Unfortunately, most retirees are unaware of this necessity and take the first offer they are made from their existing provider. The research estimated that some retirees could be upto 30% better off by shopping around, with some being as much as 50% better off.
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