Annuity, what’s an Annuity? Report highlights the need for advice.
A report conducted by YouGov on behalf of Standard Life provided some stark findings about the understanding of annuities by the UK population especially from the younger age groups.
Nearly half of us do not know what an annuity is even thought it is the main form of retirement income available currently. Interestingly 45% of women claimed to know what an annuity was compared to 60% of men, and more worryingly only 40% of those aged 33-44 also did not know what an annuity was.
John Lawson, head of pensions policy at Standard Life, said: “As life expectancy increases and the prospect of living longer in retirement becomes a reality for many, having a solid understanding of your financial options during these years is important.
“Being better informed on how your pension can fund your retirement will put the customer in a stronger financial position in the long run. And taking an annuity is one of the most common ways to turn your savings into an income when you retire.
“There are a wide range of options available when you buy an annuity. There is no one size fits all, and if somebody decides to go down the annuity route, they need to get the right advice to help them secure the best outcome.
“If they don’t even know what an annuity is, how are they going to be in a position to decide whether they should take one that’s RPI linked or level, for example?”
The need for impartial and unbiased Independent Financial Advice when selecting the appropriate route for your retirement income has never been more important. With poor annuity rates caused by the current low bond yields you need to get a financial adviser to help you select the appropriate product, in line with your situation (your health and objectives will make a difference) and to search the market for the best available rate.
Author: Robert Trapnell – Right Retirement
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