30,000 'missed out on extra cash' by taking annuity with existing provider
Around 30,000 retirees potentially missed out on thousands of pounds by taking an annuity with their existing provider last year, according to estimates.
Research by the Pensions Policy Institute for insurer LV= found that around 30,000 people across the UK potentially missed out on additional income by not shopping around.
In total, it was calculated that they lost out on £130 million, which equates to an average £4,000 over the course of their retirement.
Annuities give a set income in retirement. While they give people a guarantee they will not run out of money in their old age, they have been controversial in recent years due to people failing to shop around for a better deal.
Recent pension freedoms mean over-55s now have more choice over how they use their pension pot and they are no longer required to buy an annuity.
LV= said its research found people are increasingly expecting their retirement income to cover more than just the essentials.
Nearly six in 10 (57%) of those planning to retire in the next five years want their retirement income to also cover home maintenance costs, while 53% want it to cover holidays and a quarter (24%) would like to leave money behind as an inheritance.
One in six (17%) want to be able to use their retirement income to help their children or grandchildren with a property purchase, and 14% would like care costs to be covered.
John Perks, managing director of life and pensions at LV=, said: "Last year alone consumers missed out on a staggering £130 million over their retirement by sticking with the same provider when taking out an annuity.
"This is echoed across the retirement space with consumers failing to access the best retirement products. People are expecting their pension pot to stretch even further nowadays so it's crucial they take control and get support to help them get the most from their savings.
"Government has a vital role to play in encouraging people to take advice and therefore we are urging it to maintain momentum on the financial advice reforms to ensure retirees can get the right retirement solutions for their needs."