Around 50 per cent of people retiring each year do not shop around when choosing an annuity, and collectively could be losing out on income worth more than £237m over a typical 22 year retirement, according to MGM Advantage.

A total of 400,000 people a year purchase an annuity, of which 200,000 do not shop around to find the best possible deal.

MGM Advantage pensions technical director Andrew Tully said: “Having saved hard for retirement, it seems a cruel blow to look into an annuity with your pension provider unaware you could have shopped around the market to get the best rate.

“The lost income over a typical retirement can add up to thousands of pounds, although we think the numbers are actually on the conservative side. A significant number of people could qualify for a better annuity rate because of existing health or lifestyle conditions, and yet only four per cent of people buy an enhanced annuity from the provider their pension savings are with."

Data was based on an average £40,000 pension pot at retirement before tax-free cash.

Share Story: