Low annuity rates means 'shopping around important for pensions'

Posted by Sarah Glenister

Pensions could be negatively affected by all-time low annuities rates, making it increasingly important people shop around for the best deal.

This is the opinion of head of investment and pension research at Fair Investment Company George Ladds, who said the fall in rates could lower people's retirement income.

With life expectancy rising, annuity rates will inevitably plummet, the specialist noted, but this does not mean pensioners need to take just any product.

"What they don't have to accept is the quote being offered to them by their provider, because more often than not, it will be beaten by another provider," he claimed.

Mr Ladds urged people putting money aside for their later years to take the open market option in order to make sure they are making the best of their savings.

This comes after founder of comparemyannuity.co.uk Douglas Baillie told the Herald Scotland providers should be forced to make sure consumers knew they were permitted to go elsewhere for a better deal.

Although firms are currently obliged to tell customers about the open market option, many were hiding the information in the small print, he explained.