Which? has criticised Saga for sending out a “confusing” message by having a single-tied annuity relationship whilst campaigning for prospective retirees to use the open-market option.
The consumer body says Saga’s tied offering with Legal & General “sits uneasily” with its calls for consumers to shop around for the best deal.
Last year, concerns were raised in Money Marketing that Saga was sticking with its single-tied offering despite campaigning for greater OMO take-up.
Which? says Saga’s L&G offering means someone with a medical condition and a £50,000 pot taking a level annuity would get £257 a year less than they would with Just Retirement and £254 less than with Partnership.
A Which? spokesman says: “We believe Saga’s tied deal with Legal & General contradicts their campaign for people to shop around to get the best annuity rate. Consumers should not assume that Saga will offer them the best deal.”
Saga Services chief executive Roger Ramsden says Which? Is not presenting a “balanced reflection” of its proposition.
He says: “We have never positioned ourselves as a provider who has access to rates from the whole of the market and have been very clear that our service is provided by L&G. The Saga Annuity Service offers one option to consider when buying an annuity, and is designed to give the prudent savers of Middle Britain a better pension deal.”
Ramsden says the service does not claim to offer the best rates in all circumstances.
He adds: “The reality is a significant proportion of consumers still do not shop around when choosing their annuity, and may receive a significantly worse return over their retirement as a result.”