Annuity markets reveal hidden risks for retirement security in the UK
Adverse selection in annuity markets means that people who buy annuities tend to live longer than the average population. This affects the cost and payouts of annuity products. Requiring everyone to buy annuities at a certain age can help reduce this issue. Encouraging more people to participate in annuity markets can also help. A study comparing Australia and Singapore found more adverse selection in Australia due to a stronger government safety net.