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.’