Thousands of people approaching retirement each year will get better help to shop around for the best deal under a new industry initiative.
The Association of British Insurers (ABI) is publishing more tailored information on its website from today to help people choose the right annuity deal, which will set the size of their pension for life and could mean thousands of pounds more income over the course of a retirement.
Calls have been made in recent weeks to increase transparency over annuities, which people buy from insurers with their pension savings pot when they retire to give themselves a guaranteed annual income.
The ABI is publishing “specimen” annuity rates offered by its members, based on 12 examples reflecting different customer circumstances.
It stressed this is “not a price comparison website”, but will give people more of a flavour of what possibilities are available and the information will be regularly updated.
More than 400,000 people approaching retirement buy an annuity each year and the ABI says that shopping around for the best deal could add hundreds of pounds to someone’s retirement income each year.
There are several different types of annuity available and if someone is chronically ill or a heavy smoker, buying an “enhanced” annuity could also sharply increase their income as they are expected to die sooner.
Former Downing Street adviser Ros Altmann, has raised concerns that pensioners are taking on “the biggest gamble” of their lives when they buy an annuity.
Annuity rates have been in general decline in recent years as people live for longer. The Government is trying to boost confidence in pension saving.