Just 2.2 per cent of customers in the non-advised financial market are choosing to buy enhanced annuities compared to nearly 41 per cent who receive financial advice according to MGM Advantage.

For those receiving independent financial advice, MGM stated that according to figures taken from the latest ABI data, 40.6 per cent of annuity sales were for enhanced annuities, almost the equivalent for conventional annuities which recorded 41.7 per cent of annuity sales.

However, for those not receiving independent financial advice, only 2.2 per cent of sales by premium involved enhanced annuities compared to 83.3 per cent for conventional annuities. The difference in figures highlights the importance of financial advice in explaining the benefits of enhanced annuities in the financial market as currently 70 per cent of the retiring population potentially qualify for higher levels of retirement income.

MGM Advantage pensions technical director Andrew Tully said: “When you look at the differences between enhanced and conventional rates, you can see why as an industry we need to work hard to ensure people shop around for not only the best rate but also the most appropriate product.

“Where people receive advice it is clear many benefit substantially, but we need to do more to ensure those who don’t have access to advice also get the possible outcome in retirement.”

Share Story: