Many over 55s are confused by financial products
Latest research from Age UK Enterprises reveals that 61 percent of over 55s are confused by financial products. Only around one in three (30%) over 55s are confident that all the financial purchases they have made are best for their needs.
When asked about annuities, products that convert a pension fund into regular income through retirement, almost half of the 55-64 age group (48%) did not know what an annuity is. Of the 55 - 64 year olds, the age group most likely to require an annuity, nearly a quarter (23%) wrongly believe it to be an investment fund.
To support the increasing numbers of people reaching retirement through this area of confusion, Age UK Enterprises is today launching an Annuity Service in partnership with Premier Retirement Services, part of JLT Benefit Solutions. The service will provide information and guidance through its online comparison site or through its telephone service, to support customers in shopping around when they buy an annuity and in doing so help them to maximise their income in retirement.
Separate research shows that exercising the open market option when purchasing an annuity could result in an increase in retirement income of up to 40 percent2, which could mean an additional retirement income of £779 per year on an average annuity purchase of £30,000. The Age UK Enterprises research found that if people had an extra £779 per year, a quarter of all respondents (25%) would use it to clear debts while 26 percent would save it for the future.
Gordon Morris, Managing Director of Age UK Enterprises, said: "Our research demonstrates that many consumers aged 55 and over are confused when it comes to making one of the most important decisions for their long term financial security. This is of particular concern when buying an annuity, which, unlike most other financial products, is a one off purchase and can't usually be reversed."
He continued: "We recognised consumers need support in this area and in response to that have developed an annuity comparison service in conjunction with Premier Retirement Services to help people shop around and potentially increase their retirement incomes by up to 40 percent. We are launching the Annuity Service with Premier Retirement Services, a partner selected for their track record in providing customers with trusted products. They have impressed us with their understanding of the needs of those in later life, their professionalism and commitment to delivering great products and services."
Over one third (35%) of over 55s admit to never knowing who to ask for guidance on financial products. The Age UK Annuity Service has been designed specifically to help and support those in later life who might not know who to ask for more information or may not be able to access the available advice when buying an annuity. The service is available to those with lower value pension funds and can be accessed either through its online comparison site, telephone service or alternatively customers can opt for a full advisory service. It is also supported by substantial information and guidance for customers at or approaching retirement.
Customers who would like more information should visit ageuk.org.uk/annuity.