On the 18th November 2013 Channel 4’s Dispatches programme, featured Annuities (income for life, bought by a pension pot ).
They quote British Pension Expert Ros Altmann as follows “The mis-selling of annuities could be at least as big as the mis-selling of payment protection insurance.”
Why is this?
The answer lies with many insurance companies offering very poor value to existing pension savers, at the point of retirement. For these people the “open market option’ should always be pursued. Other annuity providers will offer better rates to attract your business. Simply put, “Shop Around”.
The next challenge is that “Shopping Around” is not easy. It is not like buying car insurance. Get it wrong and you are stuck with it for life !
There are many ways to take your income from a pension pot. In fact there are nine different ways of which a standard annuity is just one.
Approximately a half of all annuity purchasers can qualify for higher rates, based on health and lifestyle factors. The worse your health the higher the annuity.
We organise over 300 annuities per year. The lack of understanding of the clients we talk to is frightening.
I urge everyone to take qualified advice. The cost is small against the benefit of the best outcome for you.