15:39 01 July 2012
Experts recently revealed that a large number of senior citizens have the potential to increase their annual income by a minimum of 20 per cent, which can translate to millions in the long run, but that they are unfortunately missing out.
Sadly, many older people in Britain are struggling to make ends meet, not knowing that their situations could have been so much better had they shopped around more carefully for the best pension packages.
It was found that older people face a lot of challenges that prevent them from getting the best pension packages; these challenges include their lack of experience and knowledge in using the Internet and the lack of good advice and information. Thus, they end up choosing the default option offered to them.
These findings were revealed by Key Retirement Solutions (KRS) through a survey, which also showed that older people who actually invest time in comparing various pensions options gain around 21 per cent more than the amount originally quoted to them. Combined, these lost earnings sum up to around £248 per year on an average income of £25,000. Considering that there are approximately 500,000 annuities brought every year, this means that the older people in Britain are collectively missing out on a total of £124 every year.
According to National Association of Pension Funds chief executive Joanne Segars, this is a “huge problem” for pensioners in Britain. She goes on to say that, “Half a million people retiring each year are being short-changed by up to £1 billion from their future pension income.”
The survey also showed that 2 out of 3 participants in the survey could easily have gotten the 20 per cent increase. Thus, Segars advised the older people shopping for pension plans to “shop around.” This may help them get the best deal that they deserve.
Unfortunately, the pensions market currently lacks transparency, making it difficult for consumers to determine which are the best annuity plans for them. Thankfully, the last six months showed some improvements in this respect, with pensioners suffering from medical conditions such as diabetes getting more money. However, despite recent improvements, the situation is still a major problem for Britain’s pensioners, one that according to Dean Mirfin, representative from Key Retirement Solutions, can be resolved if senior spend a few minutes of their time speaking to a specialist.
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