Annuities market 'is like a minefield'
Pension providers should do more to spell out how annuities work to help consumers through the "minefield" of picking the right retirement deal, the Ombudsman Service has urged.
The service, which resolves disputes between consumers and financial businesses, said that many of the complaints about annuities could have been avoided if the pension firm had made more of an effort to explain "in plain English" exactly what an annuity is.
Common complaints are from people who bought a deal that turned out not to be suitable or that they were unaware they could not go back on their decision.
The call came as the Financial Conduct Authority (FCA) announced an inquiry into the market after finding that in around eight out of 10 cases where people have stuck with their existing pension provider to buy an annuity, they could have been better off by shopping around and switching.
Around three-fifths of people stick with their pension provider when buying an annuity, but on average the benefit of switching equates to someone having saved an extra £1,500 into their pension.