You are here: Home - Retirement -

New annuity comparison site offers commission cashback

Written by:
A new website allowing consumers to compare and buy an annuity has been launched today, promising customers cashback on any commission it receives from providers.
New annuity comparison site offers commission cashback

The execution-only service from Cavendish Online will charge a £100 flat fee and will refund to customers any commission it receives from insurers.

The site currently offers annuities from Aviva, Canada Life, LV= and Legal & General.

Typically, people buy an annuity – a product which converts their pension savings into an income during retirement – via a broker.

However, this can often mean an added cost to the consumer because brokers  tend to receive a commission of between 1% and 3% of the purchase price of the annuity from the insurer, even in cases where no advice is given. This is passed on to the consumer in higher annuity prices.

Ian Williams, managing director of Cavendish Online, said: “Hundreds of thousands of people a year buy an annuity and many fall prey to the excessive charges and commissions levied by insurers and brokers out to make a fat profit.

“With commissions of up to 3% for sales which are often non-advised newly retired consumers trying to make the most of their hard earned pension pots can lose thousands of pounds believing that so called ‘free’ annuity finding services aren’t costing them a penny. The reality is that greedy salespeople are feathering their own retirement nests by pocketing hefty commissions.”

However, Alan Lakey of Highclere Financial Services warned that consumers need more guidance when buying an annuity.

He said: “Some consumers will be prepared to deal with an online company but my experience is that the majority will wish to meet with an adviser and discuss in detail even if it is a ‘small pot’.”

Pete Chadborn from Plan Money, added: “The structure of the annuity is at least as important as the annuity rate received so whilst an execution-only service sounds attractive, those using it need to understand that they are making an irreversible decision.”

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

How to get 7% interest without tying up your savings for years

You don't have to lock your money away for years to get above-average returns on your savings.
How to get 7% interest without tying up your savings for years

NS&I one-year fixed rate bonds are back: How good are they?

National Savings and Investments (NS&I) has released new issues of one-year fixed rate Guaranteed Growth B...
NS&I one-year fixed rate bonds are back: How good are they?

Easy access rate war sees digital bank deals breach 3%

Chase and Tandem Bank have announced the interest on their respective easy access savings accounts will rise. ...
Easy access rate war sees digital bank deals breach 3%

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

Money Tips of the Week