The retired are apparently losing out on thousands of pounds due to the gap between the best and worst paying annuities.
Volatile investment markets and improving income rates have encouraged more people to consider annuities, according to retirement specialist Just Group.
However, the company found, the gap between the most and least competitive annuity deals has widened in recent months to around 14%, resulting in savers potentially spending more than necessary to secure their retirement income.
Just Group’s investigation of the Pensions and Lifetime Savings Association’s recently updated Retirement Living Standards figures revealed that a single pensioner requires £23,300 a year income for a “moderate” standard of life, of which £10,600 could come from a full state pension. This leaves a £12,700 shortfall.
Using up-to-date rates, Just Group worked out that those seeking that extra £12,700 a year would pay £221,717 if they opted for the worst standard annuity, but £194,427 by shopping around for the best – a saving of £27,290.