Retirees are reticent about financial education when making choices around cashing in their annuities
The majority of people who already have an annuity would not seek financial advice about whether they should cash it in for a lump sum, according to research from Age UK.
The survey showed that 60% of those over 60 with an annuity did not want financial advice. The research also revealed that only 36% of annuity holders would look for advice on what cashing in would entail for them, and the consequences.
Despite the new freedoms, in place since 6th April, a large majority of respondents said that they do not want to cash in their annuity for a lump sum. Only 5% said they would consider cashing in, with 78% of respondents saying they would not consider it, preferring the security of income from an annuity.
The Government is in the process of considering whether to allow pensioners to cash in their annuity – thus the research suggests that further financial education and advice is needed.
Caroline Abrahams, charity director of Age UK said: “It is extremely worrying that so many people say they would not be interested in taking advice before making a major decision which could play a significant role in their financial security during retirement. The Government needs to find a way to encourage people to get as much information as they can about major financial decisions before they make them so that everyone fully understands the implications and consequences.”