TESCO is entering the pensions market with the launch of an annuity service.
It will introduce annuity products through Tesco Compare, which currently offers car and home insurance quotes and deals on household bills.
Figures show between one-third and half of retirees do not shop around for their annuity but accept the offer made by their pension company, which can be up to 30% below the best market rate. Tesco said its plans were currently with the regulator. Nationwide and Lloyds Banking Group both launched branch-based annuity advice services last year.
Tom McPhail at Hargreaves Lansdown, which recently launched a comparison service for specialised annuities, said: "This is great news. We have been campaigning for shopping around for some time and there are still a lot of people not doing it."
Karen Barrett, chief executive at advisers' trade body unbiased.co.uk, welcomed the initiative but warned it would be non-advised.
Patrick Connolly at advisers AWD Chase de Vere said: "There is a real danger that those buying without advice will plump for the product paying the highest level of initial income, unaware of whether this is really the most appropriate."
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