Retirement Advantage is warning that more work is needed to ensure people understand the benefits of the new annuity products available following the introduction of the pension freedoms in April.
Its new research, conducted by YouGov in May 2015, surveying more than 1000 over 50s, found that while more than half (51%) of the over 50s say they understand annuities and how they work, just one in ten (11%) agree that an annuity would allow them to pass on what they need to relatives and only 15% agree that with an annuity they would get back the money they put in.
Andrew Tully, Pensions Technical Director at Retirement Advantage, said:
‘‘The new rules allowed us to fix the old concerns with annuities. Annuities can now provide a ‘money-back’ option through longer guarantees or returning any remaining money on death as a lump sum. However, although it’s early days, this message does not seem to be getting through.
We know that certainty is people’s top concern for retirement income, and these new annuities can give families peace of mind that the money invested in providing a secure income won’t be lost. There is a real risk that people will not get professional financial advice at retirement and therefore make bad decisions based on incomplete knowledge and incorrect beliefs. Making the right choices at retirement is a complex process and a professional financial adviser will be able to help ensure people understand the details and nuances of all the options available.’’
Sources: www.retirementadvantage.com (News article published 2015/07/13)