Retirees gain £4,000 by switching annuity provider

In 2016 there were around 30,000 people who took out an annuity with their existing provider and missed out on additional income by not shopping around. In total, they lost out of an additional £130 million, which equates to on average £4,000 over the course of their retirement.  

Yet the research also shows that just 25% of those already retired took professional financial advice. This is despite nearly nine in ten (87%) of those who took advice feeling confident they made the right choice about what to do with their money while 75% saying advice helped get more for their money.

Likewise, seven in ten (72%) are certain that taking financial advice means their money will last throughout retirement. Revealingly, one in five (19%) who didn’t take financial advice say even though they don’t regret not using it now, they worry they might in future.

Additionally, people are increasingly expecting their retirement income to cover more than just the essentials. Nearly six in ten (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%) say they’d like to leave money behind as an inheritance.

In addition, 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 as well.

John Perks, Managing Director of Life and Pensions at LV=, said: “Last year 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. That is why it is so important people take control of their retirement income and take financial advice to get the most from their savings and the best retirement solution for them.

“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.”