Wednesday 6 July 2016
Leading local advice charity, Citizens Advice Exeter, is urging people to shop around for their pension to make sure they get the best deal for their retirement.
A new national report from Citizens Advice found 7 in 10 people who have accessed their pension since new freedoms were introduced didn’t shop around for different products.
A quarter of consumers (24%) who stayed with their pension provider did so because they thought the product they were offered delivered the best value – despite not looking at options with other providers.
Citizens Advice Exeter is warning that if consumers don’t look at a range of different pension products they may end up with a poor value product which doesn’t meet their needs.
Based on a survey of over 500 people who have accessed their pension since the freedoms were introduced, the national report also reveals consumers who buy annuities are more likely to shop around with over half (57%) checking products with other providers. This compares to two in five (39%) who bought a drawdown product and just 14% for those taking cash.
Steve Barriball, Chief Executive of Citizens Advice Exeter, said:
“Decisions around pensions can have a big impact on how people spend their retirement so it’s concerning so many people aren’t shopping around for their pension product.
“While pension choices can be daunting, by looking at different products from other providers, consumers can make sure they buy a scheme which best suits their needs.
“A good first step is to book a free Pension Wise appointment with one of our guidance specialists who can explain your options. From there, you can look at what other providers can offer you to make sure you get the best product for your retirement. To book a face to face or telephone Pension Wise appointment call 0800 138 8292.”
Top tips to shop around for your pension
- If you receive a wake up pack from your pension provider, it doesn’t mean you need to make a decision right away. If you’re still working, it’s probably best to keep contributing to your pension.
- You have a legal right to buy your pension product from any provider, regardless of who your pension is with. You may find a better deal by looking at products from other providers.
- Make sure you check if your current provider will charge you any fees for moving your fund to another provider.
- Before you shop around, ask your current provider if they offer a guaranteed annuity rate which is a rate set when you started your pension. This normally offers better value than annuities available elsewhere.
- When comparing annuities, the Money Advice Service (moneyadviceservice.org.uk) has a useful calculator to help.
- If you have a health condition that affects your life expectancy you may get more from an ‘enhanced’ annuity.
- Comparing retirement income products can be complicated. To find out more about your options, book a free and impartial Pension Wise appointment on 0800 138 8292.
- Make sure you don’t fall victim to pension scammers. Check the Financial Conduct Authority (FCA) online register to make sure the company approaching you is legitimate. Anyone giving financial advice should be registered.
- If you are shopping around for drawdown products, comparing products can difficult and complex. It is generally best to take financial advice to find out more about this option.