British Adults And Pensions - Shop Around For Your Pension To Get Best Rates

BRITONS are becoming a cannier nation when it comes to shopping around for the best deals on everything from houses and cars to furniture, but are seriously losing out on their pension income in retirement.

Nearly half of us would try to get a better deal on a house or sofa, but just one in 10 of us would bother to shop around for an annuity to give them an income in retirement. Yet a woman with a pension pot of £50,000 who lived for 20 years into retirement could be as much as £11,000 better off by doing a bit of leg work to get the best deal, according to insurer MGMAdvantage Retirement Nation survey.

Just one in five people are aware of the Open Market Option (OMO) which allows you to search out the best annuity payments available for you, and if the woman in the above example happened to be in ill-health, she could get an additional £4,000 in income over the 20 years.

Aston Goodey, Director of Sales & Marketing at MGM Advantage said: "It's a real concern that we are all so comfortable haggling over the price of a car or new sofa but so reluctant to look around or to negotiate over the price of a pension annuity.  This is particularly worrying as you only have one chance in your life to shop around for the best possible annuity, but failing to do so could mean a difference of hundreds of pounds a month, and in some cases could even tip pensioners into poverty.

"We believe that many people close to retirement simply don't realise that they can shop around for the best annuity rate and increase their retirement income by such a significant amount of money.  For instance, last year over 60 per cent of people buying an annuity chose the one offered to them by their existing pension provider.  Shopping around is easy to do, especially with the help of a Personal financial adviser."

A third of us are simply unprepared for retirement, said Mr Goodey, and do not expect the drop in income they see in retirement.

The good news is that women are better than men at haggling over prices, and Londoners are far more accomplished, with nearly three in five prepared to barter over a price, while just a third of those in Northern Ireland would be prepared to ask for a discount.