The service takes the hard work out of choosing the right annuity by outlining customers' financial options in retirement and supporting them throughout the application process. It provides access through The Open Market Annuity Service to a panel of six leading annuity providers, carefully chosen and regularly reviewed by Nationwide on the basis of their financial strength, customer service and competitive rates. They are currently Aviva, Canada Life, Just Retirement, Legal & General, LV=, and Partnership.
The service aims to help people tailor an annuity to their personal circumstances, to help maximise the income they could receive each year. For example, customers are asked to disclose their lifestyle and medical histories - such as smoking and any medical conditions, including diabetes or high blood pressure - to see if they qualify for a higher retirement income from an enhanced annuity.
The service is backed by a telephone-based medical interview, so that the panel of providers can give customers the best possible annuity quote. It helps two thirds of customers who could qualify, to obtain an enhanced annuity rate.
By using the open market option, John Brown, 65, who has a pension pot of £50,000 and an offer from his pension provider of £2,379, can obtain £571 extra a year through Legal & General, resulting in more than £8,500 additional income after 15 years. By disclosing his medical history, he can achieve an extra £937 a year via Just Retirement, providing an extra £14,000 after 15 years.
Customers should shop around for the best rate, and not simply buy an annuity from the same company that provided their pension scheme. Failing to look at alternative annuity providers means savers could lose more than £3 billion in retirement income during the next 20 years, according to figures by the Pensions Income Choice Association.
Guy Simmonds, head of product for protection and investments at Nationwide, said:
"Many people think they have to buy their annuity from their pension provider. But that provider may not necessarily offer the best deal.
"Nationwide has handpicked a range of leading annuity providers through The Open Market Annuity Service to help customers shop around. Combined with our clear and transparent advice, we can help people choose the right annuity for their circumstances. It is our way of helping people to achieve a better retirement income, and it fits with our pledge to our customers to be ‘On your side'."
Find out more about Nationwide's annuity service.
