Many over 55's are confused by financial products
Published on 29 November 2010 10:00 AM
Age UK Enterprises launches new Annuity Service in partnership with Premier Retirement Services.
Latest research from Age UK Enterprises, the commercial services arm of the charity Age UK, reveals that 61 percent of over 55s are confused by financial products (1).
Only around one in three (30%) over 55s are confident that all the financial purchases they have made are best for their needs.
When asked about annuities, products that convert a pension fund into regular income through retirement, almost half of the 55-64 age group (48%) did not know what an annuity is. Of the 55 - 64 year olds, the age group most likely to require an annuity, nearly a quarter (23%) wrongly believe it to be an investment fund.
To support the increasing numbers of people reaching retirement through this area of confusion, Age UK Enterprises is today launching an Annuity Service in partnership with Premier Retirement Services, part of JLT Benefit Solutions.
The service will provide information and guidance through its online comparison site or through its telephone service, to support customers in shopping around when they buy an annuity and in doing so help them to maximise their income in retirement.
Separate research (2) shows that exercising the open market option when purchasing an annuity could result in an increase in retirement income of up to 40 percent (2), which could mean an additional retirement income of £779 per year on an average annuity purchase of £30,000.
The Age UK Enterprises research found that if people had an extra £779 per year, a quarter of all respondents (25%) would use it to clear debts while 26 percent would save it for the future.
Gordon Morris, Managing Director of Age UK Enterprises, said: 'Our research demonstrates that many consumers aged 55 and over are confused when it comes to making one of the most important decisions for their long term financial security. This is of particular concern when buying an annuity, which, unlike most other financial products, is a one off purchase and can't usually be reversed.'
He continued: 'We recognised consumers need support in this area and in response to that have developed an annuity comparison service in conjunction with Premier Retirement Services to help people shop around and potentially increase their retirement incomes by up to 40 percent. We are launching the Annuity Service with Premier Retirement Services, a partner selected for their track record in providing customers with trusted products. They have impressed us with their understanding of the needs of those in later life, their professionalism and commitment to delivering great products and services.'
Over one third (35%) of over 55s admit to never knowing who to ask for guidance on financial products. The Age UK Annuity Service has been designed specifically to help and support those in later life who might not know who to ask for more information or may not be able to access the available advice when buying an annuity.
The service is available to those with lower value pension funds and can be accessed either through its online comparison site, telephone service or alternatively customers can opt for a full advisory service. It is also supported by substantial information and guidance for customers at or approaching retirement.
For further information, please contact Jo Roberts or Charlotte Elmehagen on 0207 360 7877 or email us.
Notes to Editors
- Research commissioned on behalf of Age UK Enterprises. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2304 adults. Fieldwork was undertaken between 1st to 3rd November 2010. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+). An extra boost was applied for in depth analysis of those aged 55+. Results here are based on 2121 respondents.
- 40% is achieved by comparing the standard annuity rate against the best enhanced rate (example enhancement presumes person has medical conditions and smokes). Information provided by Premier Retirement Services.
Age UK is the new force combining Age Concern and Help the Aged. The Age UK family includes Age Scotland, Age Cymru and Age NI. Age UK is inspired by the belief that it can improve the lives of people in later life. It celebrates ageing and believes it presents unprecedented opportunities and challenges at home and abroad.
Age UK will challenge ageist prejudice in society, provide services that address market failures and support the public and private sectors to design age-friendly products and services. It will support people to remain in their own homes through campaigning and practical services and its Information and Advice service will offer millions of people support on a range of issues from claiming benefits to staying fit and healthy.
Age UK will fund biomedical research that helps tackle the ill health and poor quality of life that are too common as people age. Working with over 350 partners across the country, Age UK helps influence local decisions and delivers the most appropriate services. Its network of shops will act as a focal point for the local community, providing information and help with local services. Age UK works across the globe as well as in the UK, with its international partner, Help Age International, championing older people's rights and needs and as an active member of the DEC.
Age UK Enterprises
To fund its charitable activities, Age UK needs a constant flow of independent income. It seeks to achieve this through a balance of traditional fund raising and trading activities. The trading activities, through Age UK Enterprises enable it to meet the needs of older people, through products specifically designed to meet these needs; quality products such as general insurance and energy Services. Age UK Enterprises is the commercial services arm of Age UK. Age UK Enterprises incorporates: Age UK Energy, Age UK Insurance Services and Age UK Guaranteed Funeral Plans. Log on to www.ageuk.org.uk/buy for details.
Age UK Enterprises is part of the Social Enterprise Coalition; an organisation that represents a wide range of social enterprises with the overarching aim of working in partnership for the creation of effective sector products, services and knowledge-sharing networks to help stimulate and encourage growth, development and sustainability of social enterprises in England.
Age UK Enterprises scooped up the ‘Customer Care Award' at the prestigious 2010 British Insurance Awards. The judges singled out Age UK Enterprises for its exceptional customer service which is provided by Ageas Insurance Ltd, as well as for glowing customer testimonials with a ‘world-class' customer satisfaction score of 85 per cent, and 89 per cent of customers saying that they would recommend Age UK Enterprises/Ageas (Insurance UK).
Age UK Enterprises Limited is authorised and regulated by the Financial Services Authority for insurance mediation (311438). Age UK Enterprises Limited is registered in England and Wales No. 3156159, registered office: Astral House, 1268 London Road, London SW16 4ER. VAT Number: 710 3843 66. Age UK Enterprises Limited is a wholly owned subsidiary of Age UK (registered charity No. 1128267 and registered company No. 06825798) and donates its net profits to Age UK.
Age UK England (charity number 261794) has merged with Help the Aged (charity number 272786) to form Age UK, a charitable company limited by guarantee and registered in England: registered office address 207-221 Pentonville Road, London, N1 9UZ, company number 6825798, registered charity number 1128267. Age UK Enterprises is based at 4th floor, 207 - 221, Pentonville Road, London, N1 9UZ.
Premier Retirement Services
Launched in 2001, Premier Retirement Services provides annuity services to over 300 Occupational Pension Schemes with responsibility for over 1 million members. They provide services to Trustees of defined benefit schemes, where Trustees wish to secure pension benefits through an insurance company, and also to members of defined contribution arrangements, including AVCs, where they are offered a choice of either an assisted purchase or advised service, both of which deliver an end-end service designed to maximise their income in retirement, irrespective of fund size. Premier Retirement Services is part of JLT Benefit Solutions.
About JLT Benefit Solutions
JLT Benefit Solutions Limited (JLT) is one of the UK's leading employee benefit providers offering a wide range of benefit and pension services, including administration, actuarial and pension consultancy, investment, wealth management, Self Invested Personal Pensions (SIPPs), Small Self Administered Schemes (SSASs) flexible benefits, healthcare, benefit communication and financial education. Authorised and regulated by the Financial Services Authority, JLT employs over 1,200 professionals in the UK with revenues of some £90.5m in 2009. The recent acquisitions of HSBC Actuarial and Consultants Limited and iimia Wealth Management have supported JLT's continued expansion to become one of the four largest employee benefits consultancies in the UK. This year JLT was awarded Pension Scheme Administrator of the Year at the 2010 European Pensions Awards. Other pensions and employee benefits companies within the JLT group of companies include: Profund Solutions Limited, Independent Trustee Services Limited and Pension Capital Strategies Limited. JLT Benefit Solutions Ltd is part of Jardine Lloyd Thompson Group plc.