MAS could offer tool to compare enhanced annuities

The Money Advice Service is considering launching an enhanced annuity comparison tool.

The Government has stepped up its attempts to increase the number of people who shop around for an annuity, with representatives from the Department for Work and Pensions and the Treasury exploring the practicalities of making the open market opt-ion the default at retirement.

Money Marketing understands the MAS has held discussions with insurance industry representatives about offering a tool which would allow users to compare the rates offered by enhanced annuity providers online.

The MAS website currently has an annuity comparison table which asks for basic information, such as the user’s postcode and whether or not they smoke, before providing an annuity quote.

A MAS spokeswoman refused to confirm whether the industry-funded organisation is developing an enhanced annuity comparison tool.

She says: “This year, we are undertaking a review of our products and services but at this stage we cannot confirm which specific aspects are being considered.”

Radcliffe & Newlands chartered financial planner Mel Kenny says: “There is a trend towards providing enhanced or impaired annuities online. However, there should be a health warning attached to them because savers may still be able to get a better rate elsewhere or the structure of the annuity may be inappropriate.”