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Few know what pension income they will receive and levels of engagement with annuity markets are low

A third of those approaching retirement report finding it impossible even to hazard a guess as to how much income they will receive from their private pensions. This is true of nearly 40% of those with defined contribution (DC) pensions.

Despite the fact that annuity rates vary widely, over the last decade over 70% of people with non-employer DC pension funds simply purchased an annuity from the provider with whom they held their pension. Purchasing externally has, however, been more common among those who might have had most to gain - including those who held more of their wealth in DC pensions.

These are among the main findings of a new report published today by researchers at the Institute for Fiscal Studies. This report has been supported by the National Association of Pension Funds, with co-funding from the Economic and Social Research Council.

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