Brits urged to shop around for best pension annuity prices

Tuesday, November 17th 2009

Consumers approaching retirement could do more to negotiate over the price of converting their pensions into annuities.

This is according to MGM Advantage, which says that while 58 per cent of Britons haggle over the price of a new car and 48 per cent do so when bulk buying domestic furnishings, just 11 per cent do the same for their pension annuity.

The company suggests that a woman with a pension pot worth £50,000 who lives for two decades after retirement could save £11,000 by shopping around for a standard annuity in the top quartile rather than in the bottom one.

"Many people close to retirement simply don't realise that they can shop around for the best annuity rate and increase their retirement income by such a significant amount of money," comments Aston Goodey, director of sales and marketing at MGM Advantage.

A recent study by Prudential revealed that UK businesses expect 1.8 million employees to work past the traditional retirement age in ten years' time.