Pensions warning over annuity delays

Fri, 07 Nov 2008

Pension savers still risk losing out because of delays in buying an annuity, despite changes aimed at speeding matters up, one expert has warned.

Scott Mowbray, a spokesperson for Virgin Money stated that although the 30-day target for converting pension funds into annuities announced by the Association of British Insurance is welcome news, more needs to be done.

He said: "The financial services industry should be doing everything possible to make the transfer process as smooth as possible so customers receive the best possible payout."

If there are delays, people could lose out on thousands of pounds of pension cash, with no chance of getting it back, Mr Mowbray added.

This is because a fixed annuity cannot be changed after purchase and the pension holder has to live with whatever it pays out, he explained.

Recently, a survey by Zurich found that 75 per cent of Britons are unaware that they are eligible for tax relief on their pension contributions .
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