Annuity apathy costing pensioners thousands

THOUSANDS of pensioners are losing thousands of pounds because of apathy, according to the Annuity Bureau, the specialist advisory group, writes Neasa MacErlean.

The London-based bureau estimates that 70 per cent of people whose pension plans are in the form of life assurance contracts do not shop around for a competitive annuity plan in which to invest the proceeds of their pensions policy. Staying put can be very costly.

Among the hundred or so life companies that provide annuity schemes, the Annuity Bureau estimates that rates usually vary by 25 per cent between the top and bottom performers. Even among the top ten, rates typically vary by 6 per cent.

A lack of consumer knowledge and scrutiny allows poor providers to flourish, according to Peter Quinton, managing director of the bureau. He said: 'Some companies aren't competitive at all. Their annuity rates are very low most of the time.'

The bureau provides a telephone inquiry service giving a list of the three most competitive annuity suppliers that meet their requirements. This costs pounds 58.75 including VAT and can be completed in 24 hours.

The Annuity Bureau, 11-12 Hanover Square, London W1R 9HD. Tel: 071-495 1495.