Prudential withdraws from open annuity market

Hargreaves Lansdown has raised concerns that with the recent merger of Just Retirement and Partnership, the number of annuity providers on the open market is falling.

Its analysis shows that there are now just ten annuity providers available on the open market.

The FCA says that 80% of annuity investors could benefit from shopping around at retirement, yet Citizens Advice research found that 7 in 10 are not doing so.

Based on data from the Hargreaves Lansdown annuity broking service, the average difference between the best and worst rates on the open market in May 2016 was 22.1%.

Tom McPhail, Head of Retirement Policy at Hargreaves Lansdown, commented: “Demand for annuities has now stabilised, and has even started rising again in recent months. However, far too many investors are still missing out on the best income for their needs because they aren’t shopping around. Our worry now is that with fewer annuity providers available on the market, more and more investors may end up bypassing the shopping around process and simply buying an income from their existing provider.”

“Since the launch of pension freedom, more and more investors are arranging their income directly with pension providers, usually without taking advice. It is imperative therefore that everything possible is done to help them find the best possible deal.”