"People need to think about how long they expect to live in order to calculate the potential payout for an annuity," said Professor Linda Salisbury, marketing professor at Boston College and co-author of the study, which will be published the Journal of Consumer Psychology. They found a fear of death negatively influences the decisions people make earlier in their lives about financially preparing for their retirement and the reluctance of people to decide how long they expect to live for when calculating their annuity payments might be a key reason for their low uptake.
"Our findings suggest there may be simple ways financial planners can reduce thoughts about death in these situations." "There may also be strategies to help people cope with the anxiety that these thoughts might evoke," said Prof Salisbury. The researchers experimented with altering the wording in annuity brochures to see if they could influence decisions. One annuity brochure stated that the monthly payouts would be a certain amount "each year until they died". Another said the payouts would be "each year they lived". Unsurprisingly, more people opted for annuities when they read that the payouts would last "each year they lived". Enable’s IFAs are happy to help you build up your payouts for years lived.
Source: The Independent
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