Insurance companies want consumers to tell them if a new code of conduct aimed at making annuity rate statements clearer is working.
The Association of British Insurers, the trade body for annuity and pension firms, wants the information to help those approaching retirement and buying annuities to get the best deal.
The new, transparent documents are designed to deliver more details about annuity rates and to signpost how to contact providers other than the financial firm managing a pension.
The ABI will publish a range of annuity rates to help customers understand how the products of individual providers fit into the wider annuity market.
This will include both the rates of providers competing for customers on the open market and those of providers offering annuities only to their existing pension customers.
Rates published for first time
Stephen Gay, the ABI’s Director of Life, Savings and Protection said: “ABI members are committed to making it easier for consumers to shop around for the best annuity deal as they approach retirement.
“For the first time we will be publishing rates of companies who only offer rates to existing customers as well as companies competing on the open market. Buying an annuity is one of the most important financial decisions people make and shopping around for the right one can make a significant difference to people’s retirement income.
“Making the market more transparent is a further step in helping people with this decision. We want to get this right so are launching a consultation on our plans and welcome feedback from a wide range of stakeholders and insurance companies.”
The ABI intends to regularly quiz providers about their products and rates – and will then publish the information to help consumers compare products.
The details will be posted on the ABI web site https://www.abi.org.uk/
Minister backs shopping around for annuities
Steve Webb MP, Minster for Pensions, said: “This move by the ABI to improve the transparency of annuity rates is a step in the right direction. Pensions need to be simple and clear so that people can engage with them.
“I am determined to ensure that every pound put aside is turned into the maximum amount of pension.”
The ABI published a code of conduct after the government threatened to introduce new laws to help consumers find a better retirement deal from their pension providers.
The consultation is open until December 3, 2012 – the ABI can be contacted via their web site.
