Aviva pensions warns consumers of 'throwing away' annuity

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Aviva pensions warns consumers of 'throwing away' annuity

Ignorance over annuity payouts means that an estimated 8.5 million people over 55 are losing out on their retirement income.

Research by Aviva pensions found that people are least clued up over what affects annuity payouts, that it is capable to derive income from one and the benefits of a joint annuity for married couples.

Many retirees chose a standard annuity without realising that they could receive further payments with an enhanced or impaired annuity based on health grounds, with being a smoker or being overweight both increasing annuity payments.

Joint annuities are largely ignored as consumers do not understand the financial benefits of taking an annuity which covers a married couple.

Darren Dicks, head of annuity propositions at Aviva Life, stated that working out an annuity can be confusing without help.

"This lack of knowledge could see some people settling for a far lower income than they are entitled to, or others finding that their income dries up all together when their partner dies," he added.

Further research by Aviva found that people aged between 55 and 64 have an average of £8,593 saved for retirement.

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