In England, reports the BBC, the way annuities are sold is costing half a million retirees each year as much as £1bn in future pension income. In many cases, this is because of retirees’ reluctance to shop competitively — or their lack of awareness that they have the option to do so. ”The process for choosing an annuity is a complex one and the majority still go for the “default” option by sticking with their pension scheme provider,” the National Associations of Pension Funds said. ”This failure to shop around for a better deal can wipe 30% off their annual pension income, and in some cases up to 50%,” it argued. Low and middle income workers are especially vulnerable to getting a raw deal: those with pension pots under £50,000 do not have enough saved for most annuity advisers to make a profit by giving advice on which annuity should be bought.

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