Pension annuities have long been the bedrock of most retirement planning but they have certainly faced their fair share of challenges over recent years. Often dismissed as both inflexible and poor value for money, the annuity market has actually undergone a great deal of change of late. Most notable have been developments in the enhanced annuity market place with promises to usher in products more personally tailored to an individual’s circumstances.
We have also seen an increased use of fixed term pension annuities which give clients more time to fully consider all their retirement options and more recently we have seen new products enter the market that enable clients to alter the level of income they receive. While this innovation and change can only be a good thing, the industry also faces a real second challenge of ensuring that clients are aware of the range of different products available to them when it comes to retirement.
At the moment the vast majority of retirees still just choose an annuity offered by their pension plan provider rather than looking to see what else is available on the open market. Highlighting the benefits of shopping around for the best annuity rates has to be a major priority for providers going forward.
