The worst mistake pensioners make

If you're thinking of converting your pension pot into an annuity, you may be about to make one of the worst financial mistakes of your life. Merryn Somerset Webb explains why.

If you are of retirement age and are about to convert your carefully saved pension pot into a life-stream of income (an annuity), there is a strong chance that you will do so in a pretty straightforward way. You'll look at a few quotes and you'll go with the company that offers you the highest annual income upfront.

You will have done what we usually suggest bought the most simple product on the market and the one that appears to offer the most value too and exactly the same as nine out of ten other annuity purchasers. But you might also have made one of your worst financial mistakes ever.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.