The cost to small employers of setting up advisory services to help staff choose an appropriate annuity, as well as the lower profits available to advisers on small pots, are preventing employees from getting the best deal, the National Association of Pension Funds (NAPF) has warned.
Employees who are about to retire are not getting enough support when it comes to choosing their annuity, the pensions body said in a report on the advice and brokerage market used by employers in the private sector whose staff have defined contribution (DC) pensions. There are a string of barriers preventing employers from appointing these services, meaning savers end up retiring with a poorer annuity deal than they could have got if support to ‘shop around' had been embedded in their pension arrangement, the NAPF said. Employers are often too scared to go beyond the legal minimum in...
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