Just because people have been given the choice as to what to do with their pension doesn't mean they will make the best choice.
Whilst prior to pension freedoms there was much work done to encourage retirees to shop around for the most suitable annuity, this type of industry best practice has yet to include all choices now offered by the pension freedoms.
And as any professional helping people with retirement planning will know, the vast majority are ill-informed and ill-guided to make the best decisions without further guidance or professional advice.
This research bears this out with a third of people choosing their existing pension provider post-retirement rather than reviewing other products and providers. Inertia or taking the easy route can be catastrophic and could really damage potential lifestyle in retirement.
The sooner the industry, providers and employers realise they have a duty to point everyone about to access their pension to some unbiased guidance and advice the better. And the sooner individuals are helped to see the difference that a better choice may mean for their lives in retirement then hopefully the sooner more will seek the guidance they need and make better informed choices when taking their pension.
Only 33% shop around under the pension freedoms reveals new research by Citizens Advice. Citizens Advice is warning that if consumers don’t look at a range of different pension products they may end up with a poor value product which doesn’t meet their needs. Based on a survey of over 500 people who have accessed their pension since the freedoms were introduced, the report reveals : ● Over a third (36%) said they trusted their existing pension provider ● One in three (30%) had a product which met their needs ● Three in ten (29%) said they stayed because it was the easiest way to access their savings ● More than one in seven people (15%) wanted to avoid exit charges Consumers who buy annuities are more likely to shop around with over half (57%) checking products with other providers.