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Retirement

More than half of savers don’t trust their pension provider

Lucinda Beeman
Written By:
Lucinda Beeman
Posted:
Updated:
24/03/2014

More than half of consumers approaching retirement say they do not trust their pension provider to act in their best interests, according to Which?

A study by the consumer group found just 42 per cent of people trust their pension provider, and misinformation abounds.

Four in ten consumers approaching retirement who were contacted by their provider said it wasn’t clearly explained that they could get a higher annuity by shopping around and around half said it wasn’t explained they could get a higher annuity if they had certain health problems.

Which? also found that a quarter of people who have purchased an annuity thought that buying it from a company other than their pension provider made no difference, yet those who did shop around were significantly more likely to feel satisfied with their purchase.

These findings come on the heels of the massive overhaul to the annuities system, unveiled in last week’s Budget. As of April 2015 the requirement to buy an annuity will be abolished, allowing consumers approaching retirement to draw down as much or as little of their pension as they want. The Government has also guaranteed that anyone retiring on defined contribution pensions will be offered free, impartial guidance.

Richard Lloyd, executive director of Which?, said: “The Chancellor is right to fix the annuities market, which is clearly not working in the best interests of consumers. Instead of questioning whether people can be trusted with their own money, the debate should focus on how to give them genuinely impartial guidance and advice so they can get the best income in their retirement. We look forward to working with the Government and industry to deliver what consumers need at this critical time in their financial lives.”