Virtually half of over 50s don’t know that annuities are available many types and with varied choices, in response to analysis from Commonplace Life, a part of Phoenix Group.
The research instructed widespread ignorance about annuities amongst older individuals.
When those that had already annuitised, or deliberate to take action, had been requested about totally different annuity choices, there was restricted familiarity with the choices obtainable:
- Simply over a 3rd (37%) are aware of single life annuities.
- Solely 1 / 4 (26%) are aware of degree annuities.
- Only a quarter (24%) are aware of 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 imagine that annuities is not going to permit them to cross on wealth to surviving family within the occasion of their loss of life, 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 will be set as much as cowl the lifetime of a surviving companion.
That can be mirrored amongst these over 50s who’ve already purchased an annuity, or are contemplating doing so, with only a quarter (27%) aware of joint life annuities. Moreover, just one in 5 (20%) are aware of the time period “assure interval”.
Pete Cowell, head of annuities at Commonplace Life, mentioned: “Finally, essentially the most appropriate kind of annuity is normally decided by an individual’s monetary objectives and particular person circumstances. The analysis means that many individuals of retirement age would possibly overlook their choices as a result of a ignorance and miss out on the peace of thoughts annuities can present. Skilled recommendation can play an important 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 previous, between 6th– 14th March 2023.