Products related to pensions 'leave over-55s baffled'

Posted by Sarah Glenister

Annuities, products that are used to convert pensions into a regular retirement income, are deemed confusing by people over the age of 55.

This is according to research conducted by charity for the elderly Age UK, which found 61 per cent of this demographic are baffled by financial products and 48 per cent do not know what an annuity is.

Furthermore, 23 per cent of those most in need of such a deal incorrectly believe it is an investment fund and 70 per cent of over-55s are not completely sure they have chosen the best financial deals for them.

Managing director of Age UK Enterprises Gordon Morris warned such confusion is of "particular concern when buying an annuity" as this is a "one off purchase and can't usually be reversed".

Understanding financial products for retirement could be particularly important to those who have left it until they are in their 50s to start saving in pensions, as director of Churchouse Financial Planning Keith Churchouse recently warned doing so could leave people short of income in their later years.