Retirees are still missing out on thousands of pounds of retirement income despite rules introduced in 2019 to encourage more shopping around and switching in the £4bn Guaranteed Income for Life (“GIfL”) market, new analysis by retirement specialist Just Group finds.
Latest figures from the Financial Conduct Authority suggest misplaced loyalty and inertia may be eclipsing extra cash, with 53% of GIfL plans – more than 30,000 a year – purchased in 2020/21 sold by pension companies to their existing customers. Please see the attached press release for full details.
Stephen Lowe, group communications director at Just Group said: “Industry quotes show that a 65-year-old in reasonable health with an average GIfL purchase (£68,000) would miss out on £490 a year extra income by accepting the lowest offer (£3,324 a year) compared to the best (£3,814 a year), equal to £12,250 over 25 years. However, health history and lifestyle information could push that much higher.
“Since 2019 your existing pension provider has been obliged to show you how its own Guaranteed Income for Life quote compares with the best on the market. The idea being that seeing the difference will encourage people to switch but the FCA’s figures show this doesn’t seem to be happening.”
