High net worth not exploring annuity options

A report conducted by Sun Life Financial of Canada, ‘Sense Check at 60’, examined the retirement plan choices of high net worth (HNW) individuals, earning more than £500,000.

But only 22% of HNW individuals chose flexible annuity, compared to 24% of those earning £200,000 or less.  

And while higher earners were more inclined to take drawdown options, only a third did, compared to a quarter of lower earners.

Mark Stopard, head of marketing at Sun Life, said: “Sense Check at 60 reveals a significant lack of awareness of what different sizes of pension pot will buy you in retirement.  

“HNW individuals have a greater sum in reserve, so in reality, have more to lose. It’s vital they seek appropriate advice to ensure their money works as hard as possible for them.”

Meanwhile, Just Retirement analysis of figures produced by Towers Watson found between 55% and 65% of individuals retiring unknowingly qualified for larger annuity pay outs.

Nigel Barlow, head of research at Just Retirement, said: “While the smoker annuity is well known, many may still not be aware of the effect high alcohol consumption, obesity, high blood pressure and high cholesterol can have on them.”