It needs to be easier and safer to shop around

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There are nearly 20,000 people in Fareham between the ages of 50 and 64.

In the next 20 years, most of them will make the most important financial decision of their lives – buying an annuity.

Every year 400,000 people buy an annuity using their pension savings to provide an income in retirement. I know that pensions and savings can be an instant turn-off, but the choices you make are important.

Because of this, me and a number of other MPs held a debate in Westminster to talk about annuities and how we can help people make good choices.

When people retire, the easy decision to take is to buy an annuity from the same company that you invested your pension savings with – it’s called a rollover. But you can shop around.

Whilst with the lottery a rollover means someone winning more money, when it comes to annuities rollovers often mean losses. Every year, by not shopping around people retiring miss out on income of between £500m and £1bn. That’s quite a bit of money.

When I was a treasury minister, I worked to make it easier for people to shop around and make it harder for the pensions company you saved with to sell you their annuity.

Whilst progress is being made, more needs to be done to make it easier and safer to shop around. A number of websites have sprung up helping people to work their way through this important decision, but not all of them work in your interests.

Some don’t tell you whether they are offering a choice from every annuity provider or just few. They don’t say how much commission they earn from putting you in touch with a particular business.

To get good information on shopping around you can go to the Money Advice Service, an independent source of advice set up by the government.

We all want the best deal possible when we retire. By making the annuities market work better, we can help tens of thousands of people in our area.