Pensioners 'still in need of protection over annuity transfers'

People who have saved for retirement and are seeking to convert pension funds into annuities need increased protection.

This is according to Virgin Money, which made its comments after the Association of British Insurers agreed a 30-day target for the transfer of funds to annuities.

Virgin Money suggests that the risks to savers who are converting their investments have increased substantially in the light of current stock market volatility.

It said that, if annuity rates dropped by 0.5 per cent during the transfer time, the annual payout received by the retiree would decrease by around £500 a year.

"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 is a genuine threat," stated Virgin Money spokesperson Scott Mowbray.

In other news, Just Retirement recently suggested that one of the reasons why some people are drawn to unsecured pensions is because they allow holders to draw an income from their fund while it remains invested.