Some 19 million Brits aged over 50 are not considering annuities, a Financial Services Compensation Scheme (FSCS) report has revealed.
The survey also found that less than a third of UK adults aged over 50 either have an annuity or would consider buying one.
This is because the majority of the age group would not consider a pension option that could offer the security of a regular income over a set period of time.
Even though 37% who are unwilling to take risks say they are worried about not having enough money to last their retirement, 58% admit they have a vague or no understanding of annuities.
The concerns that respondents gave about annuities included; not knowing if it was right for them (29%), fear of the provider going bust (26%), not understanding how they work (25%) and a lack of protection if something goes wrong (25%).
Lila Pleban, chief communications officer at the FSCS, said: “It is clear from our latest research that those aged 50 and over must have access to the knowledge and tools they need so they can choose the right retirement product for them. That’s why at FSCS we are committed to empowering and educating consumers, so they feel confident about the decisions they make when it comes to their money.”
This comes as Hargreaves Lansdown analysis found annuity incomes have risen 20% in the last year. Currently, a 65-year-old with a £100,000 ($128,000, €117,210) pension can get up to £7,144 per year, a £100 per year increase in just the last two weeks.
