The Association of British Insurers (ABI) has provided sample pension income rates from some of the 27 member firms.
There is a staggering 24 per cent difference between the highest and lowest annual income available for a standard annuity on an £18,000 pension pot, data from the ABI reveal.
The figures reveal that for a 65-year old with an £18,000 pension pot, the best rate available is from Reliance Mutual, which according to the figures will pay an annual rate of £1,099.92. At the other end of the scale, the Hbos group will pay the lowest rate at £839.52.
The rates for those covered in the data set are detailed below:
|Legal & General||£1,069.92|
|Scottish Widows/Clerical Medical/Halifax||£839.52|
|Sun Life of Canada||£979.24|
|Wesleyan Assurance Society||£905.16|
The figures also reveal the importance of asking for medical information to be taken into account (known as an ‘impaired life annuity’) as this could more than double the income up to around £1,800, the ABI said.
The process of taking the income still makes it far too easy for savers to end up buying the wrong type of retirement income, and from a poor value provider. At MFP, we have the ability to source the market for not only the best rates, but also ensure the terms of the annuity are the most appropriate for each individual.
If you are approaching retirement and wish to consider your pension options, please contact us >>