Older Britons find financial products such as annuities and insurance confusing, according to new research from the charity Age UK.

Its figures show that 61% over the age of 55 find it hard to work out what products will suit them best.

And only around one in three of the people in this age group feel confident that the financial decisions they have made have been the best for their needs.

What’s more, just over a third of over-55s claim they never know who to ask for guidance on financial products.

However, if you are concerned about your lack of understanding of products aimed at this age group, the good news is that moneysupermarket.com is here to help.

Pensions

An annuity guarantees to pay an income for life – the amount you receive will depend on the value of your pension pot and your age – but once it’s bought you don’t have to worry about running out of money, even if you live longer than the average life expectancy.

Most people buy their annuity from their pension provider – but you don’t have to. In fact, you’ll probably get a much better deal if you shop around and compare annuity rates.

Recent research shows that exercising the open market option when purchasing an annuity could result in an increase in retirement income of up to 40%, which could mean an additional retirement income of £779 per year on an average annuity purchase of £30,000.

So it is massively important to seek independent advice before taking a decision.

Gordon Morris, managing director of Age UK Enterprises, said: “Our research demonstrates that many consumers aged 55 and over are confused when it comes to making one of the most important decisions for their long-term financial security.

“This is of particular concern when buying an annuity, which, unlike most other financial products, is a one-off purchase and can’t usually be reversed.”

You can be put in touch with a qualified pensions adviser by visiting moneysupermarket.com’s pensions channel.

Savings

When it comes to savings accounts, both the big banks and the specialist over-50s’ providers often offer specific deals for older people.

These may, or may not, best the offers available on the general market.

At the moment, for example, you can earn a higher return with a general account than with one only available to people aged 50 or over. Nationwide Building Society’s MySave Online Account is the leading easy access account paying 2.99%. You can only make one penalty-free withdrawal a year, however, and the rate includes a 12-month bonus of 1.45%.

Another alternative is Post Office Online Saver at 2.90%. It allows unlimited penalty-free withdrawals, although it also has a bonus – in this instance 1.25%.

Both of these accounts beat the leading deal reserved for the over-50s over the first year, the Saga Internet Saver pays 2.55%. However, in year two, the Saga account looks better as the bonus is smaller at 0.80%. That said, you may still find you can get a more competitive rate by moving your money to a new account after the first 12 months.

The story is the same for tax-free cash ISAs, as the Santander Flexible ISA is at 2.85% on £1 and above, while the Saga Isa Saver pays 2.60% (including a 1% bonus for the first 18 months) on £500 or more.

Meanwhile, the best deal for those looking for a one-year fixed-rate bond is with the Northern Rock E-bond issue 3 at 3.15%.

Credit cards

Specialist providers such as Saga offer some good credit card deals, with benefits aimed specifically at the over-55s market.

Saga Platinum, for example, offers customers over the age of 50 nine months at 0% on both balance transfers and purchases, although the balance transfer offer comes with a 3% fee.

The typical standard rate is also very low at 11.9%, while cardholders also benefit from no overseas’ usage fees for any transactions made in the EU – a great advantage for pensioners keen to make the most of their freedom and spare time to travel.

However, just because they are restricted to the over-50s market does not mean that they necessarily beat the credit card deals available from other card companies.

It all depends on how you plan to use your card.

The best balance transfer deal on the market at the moment, for example, is the MBNA Balance Transfer Card, which is open to all borrowers with a good enough credit rating.

It is offering 0% for 16 months on balance transfers, with a 2.88% fee. Purchases are interest free for the first three months and the typical standard rate on the card is 16.7%.

Other offers to consider include the Halifax Rewards Clarity Credit Card, which does not have any special balance transfer or purchases offers, but does have a low typical standard rate of 12.9% and no foreign transaction fees.

The big advantage with this deal is that it pays you £5 cashback for every month that you spend £300 or more on the card.

If you are the type of borrower who always clears the full outstanding amount every month, this card could therefore help to boost your income by £60 a year.

You will, however, need a Halifax current account to qualify for the offer.

The Tesco Clubcard Credit Card is also worth a look if you want a good deal on purchases.

It is currently offering 13 months at 0% on all purchases plus nine months at 0% on balance transfers, subject to a 2.9% fee.

What’s more, the card also offers access to the Tesco Clubcard rewards scheme - although the typical standard rate is relatively high at 16.9%.

Insurance

For most types of general insurance, the good news is that you become less of a risk as you get older.

Consequently, you may be offered a better deal on home insurance, for example, by a provider such as Saga than a general insurer such as More Than.

However, the main exception to this rule is travel insurance, which generally becomes more expensive, especially for the over-60s.

Preferential travel insurance would charge a 60-year-old man £18.25 for annual multi-trip European cover, including medical expenses cover of £2,000,000, baggage cover of £200 and cancellation cover of £1,000 – all with a £150 excess.

However, for a 70-year-old man, the cheapest quote for similar cover jumps to £54.05 through Insurefortravel.co.uk. And at 75 years old, the same traveller would have to pay £58.45 with holidayrisk.com.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct

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