Older people could be losing out on retirement income because of a lack of knowledge when it comes to certain terminology.
MGM Advantage carried out a survey and found that 31 per cent of over-55s have never heard of the Open Market Option (OMO), which allows those approaching retirement to shop around and look for the best rate before converting their money into an annuity.
Furthermore, 71 per cent have either never heard of an annuity or do not completely understand what it is.
MGM Advantage warned this lack of comprehension could result in £10,000 being lost on the average pension pot of £50,000 over the course of a retirement, since there is a 54 per cent difference between the top enhanced and bottom standard annuity rates.
Spokesperson Craig Fazzini-Jones said: "There's no doubt that more must be done to raise awareness of annuities and the importance of exercising the OMO to shop around."
Established in 1852, MGM Advantage is a specialist in retirement income and is based in Sussex.
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