The ABI has today launched a consultation on annuity rates transparency to help people approaching retirement get the best pension deal.
The consultation follows the publication, in March this year, of the ABI Code of Conduct on Retirement Choices, which requires ABI members to provide clear and consistent communications to their customers in the run-up to their retirement.
As part of the Code, the ABI will be publishing a range of annuity rates available 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. To make sure we get this right we are launching this consultation on our proposals and welcome feedback from a wide range of stakeholders and insurance companies.
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
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.”
ABI’s proposal in brief:
We propose to conduct a regular survey of all ABI members offering annuities, setting out a number of typical customer profiles and asking what income each of these would receive from an annuity.
This information will then be published and made available to consumers via the ABI website, along with other information about the providers, such as whether they are offering guaranteed annuity rates, and whether they refer pension customers to an annuity provider or a panel of annuity providers.
The consultation will run until Monday 3 December. To participate please visit www.abi.org.uk
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Notes for Editors
1. Enquiries to:
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Linsey White 020 7216 7415 Mobile: 07885 998 011
2. The ABI is the voice of the UK’s insurance, investment and long-term savings industry. It has over 300 members, which together account for around 90% of premiums in the UK domestic market.
The ABI’s role is to:
- Be the voice of the UK insurance industry, leading debate and speaking up for insurers.
- Represent the UK insurance industry to government, regulators and policy makers in the UK, EU and internationally, driving effective public policy and regulation.
- Advocate high standards of customer service within the industry and provide useful information to the public about insurance.
- Promote the benefits of insurance to the government, regulators, policy makers and the public.
The UK insurance industry is the third largest in the world and the largest in Europe. It is a vital part of the UK economy, managing investments amounting to 26% of the UK’s net worth and contributing the fourth highest corporation tax of any sector. Employing over 290,000 people in the UK alone, the insurance industry is also one of this country’s major exporters, with 28% of its net premium income coming from overseas business.
Insurance and businesses protect themselves against the everyday risks they face, enabling people to own their own homes, travel overseas, provide for a financially secure future and run businesses. Insurance underpins a healthy and prosperous society, enabling businesses and individuals to thrive, safe in the knowledge that problems can be handled and risks carefully managed. Every day, our members pay out £147 million in benefits to pensioners and long-term savers as well as £60 million in general insurance claims.
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