7 in 10 missing out on bigger income for life

26 July 2016

The new report ‘Drawing a Pension’ released by Citizens Advice shows that the majority of consumers are proceeding with the income offered to them by their existing pension fund company and missing out on potentially thousands of pounds in extra income.

Incredibly, when asked why they didn’t take the time to see if they could secure a bigger income for life elsewhere (which can take a matter of minutes) reasons stated included trusting their existing provider and ‘ease’.  

Why are retirees not shopping around?

Based on a survey of over 500 people, the data explains why people chose to remain with their existing provider:

• 36 per cent said it was because they trusted their existing pension provider
• 30 per cent had a product which they felt met their needs
• 29 per cent said they stayed because it was the easiest way to access their savings

Following the release of the figures, Citizens Advice has warned that consumers may end up with a poor value product which doesn’t meet their needs if they do not use their right to search for a better value plan.

How can I get a better deal?

Around six months before you are due to retire, your existing provider will send you a ‘wake up pack’ detailing the amount of income you would receive from the most basic of annuities if you stayed with them.

This income is based on a rate that may not be competitive, therefore, you should consider exercising your right to the “Open Market Option”, which allows you to shop around for a better deal for your retirement income.

It means you do not have to accept the type of annuity or default income offered to you from the company or companies with whom you have saved your fund over your career.

By instructing a specialist in retirement income to search for a better deal and different type of annuity which is also best suited to your individual needs and circumstances, you could boost the amount of income you are offered by up to 75 per cent in some instances.

Calculate instantly how much income I could get

How can such large increases be achieved?

Your pension fund company may not offer enhanced annuities, which could entitle you to a bigger income for life if you have a history of poor health, or if you a smoker, for example.

When you exercise your OMO and ask a specialist to search the market for a better deal for your money, they will explain the benefits of other types of annuities to you and take the time to search for the most competitive rates available across the market.

The specialist will also find out if you qualify for enhanced terms, which could see you being offered a potential 75 per cent more income than what you are offered by your current provider.

It takes a matter of minutes to check 

With over two thirds of people drawing their pension from their existing provider rather than shopping around, you may be surprised to discover how straight forward the process really is!

At Retirement Line, we can tell you in minutes if we could get you a better deal for your retirement income, and if you wish to proceed we can arrange everything on your behalf with our hassle-free service.

If you are around six months or less away from taking your retirement income, speak to our specialist team today. Call for a free quote on 0800 652 1316.