Following on from State of Retirement report 2017 chapter 1, which explored how much time people were spending planning for retirement, the second chapter reveals how many consumers are losing money by sticking with the same provider.
Planning for retirement and getting financial advice is still quite a daunting prospect for many, however the value of this advice does start to become clear to consumers who have used it.
Over eight in ten (81%) of those who took advice feel confident that they’ve made the right choice about what to do with their money, while three-quarters (75%) say financial advice helped them get more for their money.
In addition, the research also found that nearly one in five (19%) who didn’t take financial advice say even though they don’t regret not using it now, they worry they might in the future.
LV= has long been an advocate of financial advice, particularly at the point of retirement where decisions are increasingly complex.
LV=’s handy pension calculator allows people to check whether they’re on track for retirement and how much their pension is likely to be worth as an income at retirement.
Methodology for consumer survey: Opinium, on behalf of LV=, conducted online interviews with 2,404 UK adults between 17th and 27th March 2017. Data has been weighted to reflect a nationally representative audience.
Methodology for amount missed out on in retirement: The Pensions Policy Institute (PPI) reported that around 80,000 annuities are purchased each year, of which 52% are purchased from the existing provider. PPI calculated that if 80% of those who purchased an annuity from their existing provider continue to lose around 6.8% of retirement income that could represent a loss of around £130 million over the lifetimes of those purchasing in annuities in 2016.
 PPI briefing note "What is the impact of not shopping around for annuities?"
 LV= calculated from the PPI figures that of the 52% of 75,355 annuities taken out in 2016 with existing providers, 80% of these would lose out on retirement income, equating to 31,347 people. With 31,347 people missing out on £130 million, that works out as £4,147 per person on average over the course of their retirement.