Your Money: A great escape for travel agents

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The Independent Online

It might be summertime but the living won't be easy for the thousands of holiday makers who will be fleeced on their travel insurance this year. Of those who bother to take it out - and 22 per cent don't, according to Boots Travel Insurance - 85 per cent will buy their policy from their travel agent or tour operator.

But while this is convenient, you'll pay more than if you shopped around. And in many cases an annual policy is better value than a single-trip deal if you are likely to take more than one break during the year.

Last week the Treasury announced that it will regulate all companies offering travel insurance, apart from travel agents and tour operators. This will leave holiday makers exposed if they buy their overpriced insurance from these sources, which will fall outside the regulatory ombudsman scheme.

The Treasury's decision defies logic.

Pension power

The Financial Services Authority's comparative tables have rightly been criticised in the past for their emphasis on fund charges rather than performance. But last week the FSA launched its annuity comparison service, which deserves applause.

Although it has long been possible to shop around for an annuity - the guaranteed income for life you must buy with your pension pot by the age of 75 - many people have been unaware of this. Instead, they have automatically bought their annuity from their pension provider, which is often not the best deal.

Independent financial adviser (IFA) Chartwell Investment calculates that a 67-year-old male with a fund value of £125,300 would get £8,146 a year if he picked the worst annuity on the market, or £9,491 if he chose the best one. But many people either don't know about this or can't be bothered to take action. As a result, they are missing out on thousands of pounds.

In response, the Government has made it obligatory for pension providers to write to policyholders nearing retirement to tell them of the open market option. But since this rule came into effect last September, the number of people buying an annuity on the open market has mysteriously fallen.

If you intend to research annuity rates, the FSA tables are an excellent place to start. All you have to do is key in the size of your pension pot, your age and the type of annuity you would like. The tables also include providers' contact details and tell you whether you should apply direct or through an IFA.

Go on, give it a go at www.fsa.gov.uk/tables

m.bien@independent.co.uk

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