Three quarters of workers coming up to retirement are in danger of losing out on pension income because they are not shopping around for their pension annuities.
Research by Just Retirement found that 75% of over 55s questioned did not have a full grasp of their retirement funding options, particularly the right to shop around for a pension annuity.
The firm, which specialises in retirement planning, points out that choosing the right annuity is particularly important at a time when savings interest rates are low because it can boost pension income.
To illustrate the point Just Retirement has calculated that pensioners have missed out on around £500 million of additional income in the past 12 months by failing to secure an “enhanced annuity”, if they have underlying health or lifestyle issues.
The company’s head of technical services, Nigel Barlow, comments: “Consumers spend up to 40 years of their lives saving for retirement but when it comes to converting the money into a regular income via an annuity, there is a huge lack of understanding.”
He adds: “It is critical that consumers are made aware of their options and seek advice on the right retirement income for their needs.”