Majority wouldn't seek advice over annuity
Published on 27 June 2015 12:01 AM
60 per cent of people would not seek financial advice when deciding whether to cash in their annuities according to Age UK survey.
New figures from Age UK reveal that the majority of people with an existing annuity would not take financial advice to help them decide whether to cash it in for a lump sum.
According to the TNS poll for Age UK[i], 60 per cent of people aged over 60 with an annuity were not interested in financial advice. Only 36 per cent would get advice about the consequences of cashing it in or not.
The findings have important implications for the Government which is in the process of considering whether to allow pensioners to cash in their annuity and raises questions about whether additional action is needed so that people receive as much information as possible before taking these important financial decisions.
Age UK's survey also revealed that the overwhelming majority of people aged 60 and over with an existing annuity do not want to exchange it for a cash lump sum.
It found that 78 per cent of people with annuity income would not consider it, preferring to continue to receive a secure income for the rest of their lives. Only five per cent said they would consider cashing in their annuity.
Caroline Abrahams, Charity Director of Age UK said:
'It is extremely worrying that so many people say they would not be interested in taking advice before making a major decision which could play a significant role in their financial security during retirement. The Government needs to find a way to encourage people to get as much information as they can about major financial decisions before they make them so that everyone fully understands the implications and consequences. That includes ensuring that people have access to guidance and advice on how to get the best value from their pension savings, whatever they choose to do with them.'
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[i] *Survey conducted by TNS Face to Face Omnibus from the 3rd - 14th June. 1481 60+ year olds in Great Britain were surveyed in total and 85 (small sample size) had both a final salary pension and annuity income.
2011 Census small area statistics and the Postcode Address File (PAF) were used to define sample points. These are areas of similar population sizes formed by the combination of wards with the constraint that each point must be contained within a single Government Office Region (GOR). 600 points were defined south of the Caledonian Canal in Great Britain, with 5 points defined north of the Caledonian Canal. These latter differ in size from the other points and each other to meet the need to separately cover the different parts of the Highlands and Islands.
We work with our national partners, Age Scotland, Age Cymru and Age NI and our local Age UK partners in England (together the Age UK Family). We also work internationally for people in later life as a member of the DEC and with our sister charity Help Age International.
Age UK believes that everyone should have the opportunity to make the most of later life, whatever their circumstances. We provide free information, advice and support to over six million people; commercial products and services to over one million customers; and research and campaign on the issues that matter to people in later life. Our work focuses on five key areas: money matters, health and well being, home and care, work and training and leisure and lifestyle.
Age UK is a charitable company limited by guarantee and registered in England (registered charity number 1128267 and company number 6825798). Age Concern England and Help the Aged (both registered charities), and their trading and other associated companies merged on the 1st April 2009. Together they have formed the Age UK Group ("we"). Charitable services are offered through Age UK and commercial products are offered by the Charity's trading companies, which donate their net profits to Age UK (the Charity).