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18 Nov 2013

Britons Urged To Shop Around For Annuities To Maximise Retirement Income

Britons may be missing out on thousands of pounds in retirement income because they do not make the right choices when buying an annuity. Instead of shopping around and looking into as many options as possible, savers frequently turn to high-street providers that they are familiar with, even though they may not give them the best deal, pension experts say.

When a person reaches retirement age, they can use savings generated in their pension pot to buy an annuity - a contract that provides a certain income during the period in which they are retired. Shopping around for annuities can grant better retirement income, and the difference can be up to several thousands of pounds.

Figures from the government´s independent financial affairs service, the Money Advice Service, revealed that failure to shop around for the best deals results in up to £1 billion in potential retirement income being wasted every year.

When people turn to independent financial advisers for advice, they are usually given quotes from around 25 providers, but many large high street companies get their quotes from a smaller list, known as panels. While on many occasions this can give people a general idea of the market, it may not necessarily reveal the best deals.

Pension expert Yvonne Goodwin told the Daily Express that the best thing to do when buying an annuity is to get as many quotes as possible, and try to learn as much about annuities as possible before making a final decision.

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