Hargreaves Lansdown has warned consumers are still being rolled over into annuity products without shopping around, as the latest figures from the Association of British Insurers shows the gap between the best and worst annuity rates has widened.
Data published last week shows the gap between best and worst rates has increased from 31.3 per cent in December to 34.9 per cent in July.
Hargreaves Lansdown head of pensions research Tom McPhail says: “It is painfully obvious that some companies are making no effort to offer their customers decent value. For investors who do shop around, competitive rates are available, unfortunately we also know that in spite of the recent Budget reforms, investors are still being rolled over into their existing provider’s annuity. What’s more, many pension providers are failing to offer investors a low cost alternative to annuities, such as a drawdown plan.”
Data from IT provider Iress shows sales of advised annuities through its system have fallen 40 per cent year-on-year on the back of the Budget.