Data revealed by pension advisor Annuity Direct has shown that as many as one in seven pensioners could incur financial penalties due to poor advice that they have been given. In response to these findings, the company have called on the FSA to extend the advice given to pensioners about switching financial products
The company say that pension providers are riding on the back of a “lack of guidance and professional training” as those giving the advice are not thoroughly looking into the potential pitfalls of switching to annuity products. Bob Bullivant who is the CEO at Annuity Direct said that many pensioners could be unaware of clauses in their pension policies that could result in either financial penalties or benefits. The consequence for the unelightened is that pensioners will have a reduced income for the rest of their lifetime.
The FSA guidelines state that a “full investigation must be made of guaranteed rates, penalties and charges.” However it appears that this is not being enforced in all instances.
