It has been revealed in a recent survey that half of over-55s trust their current provider to give them the best rate.
Annuitants could miss out on over £7,000 of extra retirement income because they are simply trusting their existing pension provider to give them the best rate rather than shopping around, a survey suggests.
A poll of 2,000 over-55s by Partnership found that almost half (49 per cent) of people take the annuity that their pension provider offers them because they trust the company.
The insurer said this could cost a typical annuitant £5,106 over 20 years (17 per cent of their income) or £7,180 (23 per cent of their income) if they had a common condition such as Type 2 Diabetes.
Of those who had already annuitised, 37 per cent had simply accepted what their pension provider offered them and 12 per cent undertook research before deciding that their pension provider would offer them the best annuity deal.
Of those who had yet to annuities, up to 31 per cent said they would take the annuity offered by the company they had saved with for retirement.
Of these, 19 per cent said they would do some research but probably take the annuity offered by their pension provider and 12 per cent said they would simply accept the offer that they were given by their pension fund.
When asked why they had chosen, or would choose, to remain with their existing provider, 41 per cent said that they trusted their pension provider and 27 per cent claimed that they had done their research and the company that they had saved with for retirement offered them the best deal.
A further 25 per cent said that “my pension pot is so small that anyone else is unlikely to give me more” and 24 per cent felt that it was the easiest thing to do.
Ken Ferguson, director Ferguson Oliver, said consumers need to speak to an adviser to ascertain whether their current provider is offering them a fair rate.
He commented: “It is arguably even more important if you have a medical condition or have made lifestyle choices which may make you eligible for an enhanced annuity.
“Making the right decisions around retirement income can take time but if you weigh this against the benefits you can derive, it is clearly worth it.”