Virgin Money Slams Annuities Delays

By Peter Wakeford
Published on 1 Sep 2008
AddThis Social Bookmark Button
Virgin Money Slams Annuities Delays

Pensioners could lose out on hundreds of pounds for each month before their income begins, analysis from the firm has shown.

Hold-ups in transferring pension pots into annuities might cost some savers as much as £10,000, Virgin Money said today.

According to calculations from the firm, a 65-year-old man with a typical pension pot of £100,000 would lose around £645 a month due to the delays, which mainly come about through paperwork errors on the part of either the customer or the provider. Assuming a three-month delay, a 0.5 percent drop in annuity rates and a 20-year payout period, lifetime losses are pushed in to the five figures.

The Virgin Money analysis follows the release of new figures from regulator the Financial Services Authority (FSA), which showed that around six in ten annuitants faced some form of delay before receiving their first income from the products.

Virgin Money spokesman Scott Mowbray commented: "Buying an annuity is a one-off decision and one which retired people have to literally live with. With a fixed annuity the income you receive is fixed for life so the losses from delays are also fixed for life. There's no second chance. 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. The risk of losing thousands of pounds for life is a genuine threat.

He added: "Pension providers have to improve their transfer times and the FSA is to be congratulated on its work although clearly more needs to be done."

Compare savings accounts via money.co.uk

Money Saving Newsletter

Already registered? Login Here

Email:

We will NOT pass your details on to any third party.

See some of the recent tips you could have benefited from.

Your privacy:

Read our privacy policy.
We are registered with the Data Protection Act (1998): No. Z6245956
details
We are regulated by the Financial Services Authority: No. 415689
details



Add Your Comment

Name: 
Comment: 
You have 1000 characters left.

Latest Savings Accounts Articles & News

Savings Accounts Articles

Survey Highlights Shift in Retirement Concerns
Survey Highlights Shift in Retirement Concerns

Life's pleasures have taken a backseat as money worries cause concern among pre-retirees.

Research Examines Pros and Cons of Early Pensions Access
Research Examines Pros and Cons of Early Pensions Access

Could allowing people to access their pension savings earlier encourage them to make bigger contributions?

Pension Savings Plummet
Pension Savings Plummet

As disposable incomes are squeezed, people are reducing their monthly pension savings.

£0.25 Billion Paid to Icesave Customers
£0.25 Billion Paid to Icesave Customers

Icesave savers are getting their money back.

Survey Highlights Savings Optimism
Survey Highlights Savings Optimism

Britons are feeling more positive about their ability to set aside savings, new research shows.

British Consumers 'Protecting Their Savings'
British Consumers 'Protecting Their Savings'

Britons are attempting to guard their savings pots by making smaller withdrawals, new research shows.

Britons Expect to Retire Later
Britons Expect to Retire Later

The economic crisis has dampened hopes of an early retirement for many Britons.

Govt loan to help Icesave savers
Icesave Customers 'To Benefit' From £800m Government Loan

An £800 million government loan to the Financial Services Compensation Scheme will benefit consumers with savings in failed Icelandic bank Icesave.

Popular Related Articles

American Homeowners Offered Mortgage Help
American Homeowners Offered Mortgage HelpThe US government has stepped in with another support package for mortgage borrowers.

Latest Related Headlines

Northern Rock Promises to Help Struggling Mortgage Borrowers
Northern Rock Promises to Help Struggling Mortgage BorrowersAction on repossessions has been promised by Northern Rock.

Other Money Headlines

Free Flights from Ryanair
Free Flights from RyanairRyanair are running a free flight sale this week with 1 million seats up for grabs.
RSS FeedSavings Accounts News
RSS FeedLatest Headlines
Free Services Money Saving Newsletter
The best money saving deals, freebies, rate alerts and advice emailed to you every week.
Enter your email:
Find Companies Savings Guide RSS Feeds - Subscribe!
The "advice" given in our money saving tips is for information purposes only and should not be construed as "financial advice".
money.co.uk recommends you seek professional advice before proceeding with any investment or financial decision.
Site Map | Privacy Policy | About Us | Contact Us
money.co.uk is a trading name of Dot Zinc Limited, who are authorised and regulated by the Financial Services Authority. FSA Registration Number: 415689.
Copyright © www.money.co.uk / Dot Zinc Limited 2002-2008. All rights reserved.
Home | Login | Sign Up