Health warnings for pension annuity options
A bit of a similarity; pension annuities and cigarette packets. The Association of British Insurers is understood to be considering introducing cigarette-packet-style warnings on pension annuity provider marketing material to encourage more people to exercise their open market option.
The news comes as the Department for Work and Pensions looks set to publish more damning research of pension annuity provider Omo material following recent FSA research that found 40 per cent of material failed to meet regulatory requirements.
The DWP research, which is soon to be published, found consumer misunderstanding over the process of buying an annuity. The DWP will recommend a clearer and more timely provision of information from providers, including a single document explaining key decisions and increased awareness of the need for independent financial advice.
The ABI is expected to release a new code of practice on Omo in the next two weeks which could include a warning such as “failing to shop around for an annuity could damage your wealth”.
An ABI spokesman says: “Insurers can use our wording exactly or they can adapt it to their own house style. The letter aims to be succinct and clear.”
