Industry experts have highlighted that the most significant decrease in life expectancy, for a decade could put annuities in a more favourable spotlight as a retirement option.
While this development may translate into more generous annuity values being offered, thousands of people are not prepared for retirement, according to a new study from The Wisdom Council called ‘The Great Retirement Study’.
The research shows many 55 to 75-year-olds need guidance to understand their options, with almost one-third feeling ‘not at all confident’ or ‘not very confident’ about having enough money in later life.
Punter Southall Aspire chief commercial officer Alan Morahan said higher interest rates mean annuities are now in a more favourable spotlight, but financial planning is vital to help to put their value into context.
He said “Employers can play a more significant role to support staff approaching retirement. Our own survey found just over half of companies offer no guidance on how to plan for life after work, while just under a third offer some help. Only 12% pay for consultants to assist their workforce. The advice gap remains a canyon employers could easily fill to help tens of thousands more approach retirement with confidence. Despite the headline of shorter life expectancy, many heathy people could spend upwards of 30 years in retirement. Employers have an important role to play, from those just starting out who need to be encouraged to save more, to those approaching retirement who need help with often very complex decisions.”
Punter Southall Aspire is helping plug this gap with Pension Potential an online tool free to employers to help staff assess how large a retirement income their pension can buy for retirement by comparing every annuity on the market. It also offers a picture of what drawdown can look like or a mix of options.
