Some 80% of retirees who stick with their pension provider when they buy an annuity could get a better deal elsewhere, pointing to a huge failure in the open market option, the Financial Conduct Authority (FCA) has found.
The regulator's thematic review into the annuity market found eight out of ten people could get a more generous rate if they shopped around and bought an annuity from a different provider. This equates to having an extra £1,500 saved into a pension just before retirement, it said. The FCA found that for a pension pot of £17,700 (the average size in this review), buying an annuity from the existing pension provider would return an average annual income of £1,030. However, by shopping around and switching provider, that annual income would increase by 6.8%, or £71, to £1,101. It s...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
