Shopping around for the best pension annuity could boost pensioners’ incomes by thousands of pounds, a survey from MGM Advantage has claimed.

According to the UK retirement income specialists, the recession has meant that 49 per cent of Brits are prepared to shop around when it comes to cars, houses and other big ticket items.

However, the number of Brits who say they would shop around for a pension annuity stands at just 11 per cent as less than one in five adults are aware of the Open Market Option (OMO), that allows those nearing retirement to shop around for the best annuity rates.

The MGM Advantage research reveals that a woman with a £50,000 pension pot, who lived for 20 years after retirement could be up to £11,000 better off by shopping around for an annuity. This could increase by a further £4,000 if they found that they were entitled to an enhanced annuity.

Commenting on the findings, Aston Goodey, director of sales and marketing at MGM Advantage said: “It’s a real concern that we are all so comfortable haggling over the price of a car or new sofa but so reluctant to look around or to negotiate over the price of a pension annuity.

“This is particularly worrying as you only have one chance in your life to shop around for the best possible annuity, but failing to do so could mean a difference of hundreds of pounds a month, and in some cases could even tip pensioners into poverty,” he said.

The research also found that more than 60 per cent of people buying an annuity chose the one offered to them by their existing provider last year, Mr Goodey comments:

“We believe that many people close to retirement simply don’t realise that they can shop around for the best annuity rate and increase their retirement income by such a significant amount of money.”

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