The institute’s findings released today (September 30) show there was £ 130million in annuity income ‘lost’ in 2019 linked to the lack of research by savers.
This was based on PPI calculations – backed by Canada Life and Retirement Line – which found that shopping had the potential to increase a pension saver’s income by around £ 7,000 per 100,000 pot. £.
Canada Life director of retirement income Nick Flynn said the £ 4bn annuity market was not showing its value due to the fact that savers “just didn’t understand” their role in the selective search for the best offer.
PPI 2021 DC Future Book, released on September 23, saw a sharp decline in annuity sales in 2020 with less than 50,000 sales in the last year.
This is happening despite the introduction of informational prompts, Flynn added.
“The situation seems to be getting worse. People don’t know what they don’t know, and it’s not just about getting the best deal, it’s just as important to buy the right pension. or professional advice is difficult at best. “
With the government’s coronavirus retention program, also known as the leave, due to end today, Flynn added that it was “just for the PPI to shine the spotlight on the [annuity] market and start a debate “.
He explained: “Thousands over the age of 55 will be considering their professional future. It is important that anyone considering their retirement options seeks advice and guidance on making the right decisions based on their circumstances.”
A stagnant choice?
PPIs Shop Annuities: The Changing Market report also noted the difficult link between fewer annuity purchases across the board and the constant size of the market.
“It should be noted that the drawdown market was severely affected by the Covid-19 pandemic in 2020, with people becoming more cautious about withdrawing their savings, while the annuity market was affected to a lesser extent.” , said the PPI. “Additionally, since 2015 there has been an increase in the number of people withdrawing their entire pension fund, with over 250,000 full withdrawals made in 2019/20.”