Pensioners lose nearly one-fifth of their retirement income by taking the annuity offered to them by their pension provider without shopping around, a report has revealed today
A survey undertaken by insurer Partnership said that found that almost half (49%) of the 2,000 people over 55 polled would take an annuity that their pension provider offered as they 'trusted' the company.
Based on a pension pot worth £28,900, this could lose them as much as £5,106, or 17% of their income, over 20 years, compared to offers available elsewhere.
'Blind trust can cost people a significant proportion of their retirement income so it is vital that consumers play an active part in their own at-retirement planning,' Andrew Megson, managing director of retirement at the insurer warned.
People in the West and East Midlands would lose out most, costing a typical annuitant thousands of pounds over 20 years - £5,898 and £5,834 respectively - or 20% of their income, the report found. However in London, savers were less affected losing only 14%, said the insurer.
Savers with medical conditions were also urged to shop around as those with type 2 diabetes, for instance could lose £7,180 or 23% of their retirement income.