Industry experts are keen on you getting the best annuity rates at retirement. Intelligent Pensions’ David Trenner believes that insurers should be encouraged to help people like you make accurate comparisons between different retirement products on the market and how your pension provider compares. Differences between annuity rates can amount to more than 15% in some cases and equate to a significant difference in valuable retirement income. That difference can be greater if you have any health or medical conditions.
Trenner suggests that insurers can’t just send clients 24 pages of pre-retirement literature that says they are offering you this amount of annuity income and if you want to discover if you can get more then you should see an adviser. He adds that the ABI should say to insurers that they must give the client annuity rates for the top three annuity providers in the market. So, for example, it could go something like this of ‘we can offer you this annuity rate but the top three annuity rates in the market are offered by these other companies.’ Even if that insurer does not offer enhanced annuity rates then they should still provide the leading three enhanced annuity quotes, he concludes. This isn’t so easy without medical details, I would suggest.
Gallagher Benefit Consulting’s Stuart Grennan suggests that more can be done to assist customers make effective comparisons between different retirement products. He states that it would be good if the insurer could refer the customer to an online portal where they could compare different annuity quotes. He hopes insurers will get their acts together to provide people with access to market annuity rates rather than just those from the existing pension provider, as people need to be helped to be able to gauge whether their existing pension provider is offering them the best annuity rates.
To assist retirees to get the best annuity rates at retirement the ABI has recently commissioned research into the effect unrequested annuity quotes can have on customers and says the results of the research will have an impact on how the selling code develops. At the moment they don’t know what impact unrequested annuity quotes have on client buying behaviour which is why they have commissioned this piece of research. They need to understand more about whether these quotes help or hinder the decision making process and once they have this data they can make a decision on how to proceed best.
