Pensioners lose £1bn in annuity muddle

HALF a million people retiring each year are missing out on up to £1 billion in pension income because of a confusing annuity system, according to a report out today. .

Many private sector workers fail to get the income they need from their pension pot because of obstacles preventing them from securing the best deal on annuities, used to convert savings into a retirement income. The National Association of Pension Funds (NAPF) found £1bn in pension income unclaimed now could treble over the next decade as millions are automatically enrolled into workplace pensions.

Most people still take an annuity from their pension provider, but by shopping around could boost annual income by around 30 per cent. Joanne Segars, NAPF chief executive, said: “Annuities need straightened out. People are saving for their working lives only to end up short-changed by a toxic system.”

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