" I recently read that Tesco is entering the annuity comparison market. This provides me with the perfect opening comments.
Many
commentators and annuity broking businesses view the annuity market in
terms of lots of people with small pension pots who need to be sold the
annuity which pays the highest starting income.
It is hard to argue with the numbers; over £13bn of annuities are
sold every year and the average purchase price is still less than
£30,000.
It seems that Tesco and other firms who know a lot about retailing are aiming for this mass market.
But
what about those who prefer to shop in more upmarket supermarkets where
price is not necessarily the main driver and where personal service and
quality are important factors. Where can they go to get advice on their
annuities?
This brings me on to the theme of a paper which I have
recently published in conjunction with MGM and Prudential and with help
from Professor John Maule, a leading authority on behavioural
economics.
The paper argues that it is time to question whether the traditional
guaranteed annuity should remain as the default option for those with
above average sized pension pots."
To read the full article, click here and you can also download the report Annuities at a tipping point.
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