Virtually half of over 50s don’t know that annuities are available in many kinds and with numerous choices, based on analysis from Commonplace Life, a part of Phoenix Group.
The examine advised widespread ignorance about annuities amongst older individuals.
When those that had already annuitised, or deliberate to take action, have been requested about totally different annuity choices, there was restricted familiarity with the choices obtainable:
- Simply over a 3rd (37%) are conversant in single life annuities.
- Solely 1 / 4 (26%) are conversant in degree annuities.
- Only a quarter (24%) are conversant in inflation-linked annuities.
- Solely 10% of over 50s are conscious of enhanced annuities.
- Simply 10% are conscious of worth/capital safety.
Many over 50s mistakenly consider that annuities won’t enable them to move on wealth to surviving kinfolk within the occasion of their demise, and state this as a key barrier to buying one.
One in ten (13%) are usually not planning to buy an annuity due to this motive, with greater than half (56%) of throughout 50s unaware that an annuity could be set as much as cowl the lifetime of a surviving associate.
That can be mirrored amongst these over 50s who’ve already purchased an annuity, or are contemplating doing so, with only a quarter (27%) conversant in joint life annuities. Moreover, just one in 5 (20%) are conversant in the time period “assure interval”.
Pete Cowell, head of annuities at Commonplace Life, stated: “Finally, probably the most appropriate kind of annuity is normally decided by an individual’s monetary targets and particular person circumstances. The analysis means that many individuals of retirement age may overlook their choices as a consequence of a lack of understanding and miss out on the peace of thoughts annuities can present. Skilled recommendation can play a vital function right here in serving to individuals perceive the true worth of an annuity.”
Annuity charges have strengthened considerably during the last two years and the most recent Commonplace Life Annuity Fee Tracker discovered that charges for a wholesome 65-year-old reached 7.25% in September 2023.
• The analysis was commissioned by Commonplace Life and carried out by Opinium, with a nationally consultant pattern of two,000 over 50 years outdated, between 6th– 14th March 2023.