More than half (54 per cent) of individuals aged 55 and over that are planning to purchase an annuity said that they would not switch provider due to the trust they have in the company they are currently saving with.

The research by Canada Life found that 30 per cent of respondents felt they had a good relationship with their existing pension provider, while 22 per cent said they provided good customer service.

More than one in 10 (14 per cent) of those planning to purchase an annuity at retirement said that they would not consider changing provider when purchasing an annuity ‘at any price’.

Of those that said they would not consider switching provider, 14 per cent said they would not know where to start, while 12 per cent thought it would be too involved or complex.

Nearly one in 10 (9 per cent) said they would not consider shopping around due to concerns regarding the amount of time it would take and potential delays to accessing income, while 7 per cent thought it could only be done though seeking regulated advice.

“Data recently published by the FCA shows that many people are not shopping around when choosing their annuity and that suggests the ‘information prompts’ introduced in March 2018 have had little effect,” commented Canada Life director of retirement income, Nick Flynn.

“Around one in 10 people who plan to buy an annuity when they retire will simply buy direct from their current pension provider, irrespective of the income they are offered.

“This approach is unlikely to provide them with the best deal or the best type of annuity for their individual circumstances and will lock them out of extra income that could be available. As an industry it is up to us to do more to ensure customers do not get a poor deal.

“Buying an annuity is a significant financial step and an adviser or annuity broker will always be best placed to help you understand the choices available.”

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