Advisers, insurers and pension experts have backed ABI proposals to force all annuity providers to publish information on the rates they offer to consumers.
Last week, the trade body set out plans to conduct a regular rate survey of members as part of its compulsory shopping around code of conduct, due to be launched in March.
The survey will set a number of hypothetical customer profiles and ask each provider what income each of these people would receive from an annuity.
The results will then be published on the ABI website every two months.
All ABI members, including those who do not compete for new annuity business, will be required to complete the survey.
Forty Two Wealth Management partner Alan Dick says: “The biggest problem at the moment is apathy – people are simply not engaging in the retirement process and as a result many end up with a poor value annuity.
“This has to be a positive move from the ABI. Anything that improves transparency and encourages more people to shop around is a good thing.”
Legal & General individual annuity business director Phil Naylor says: “These proposals should ensure customers who shop around are armed with the essential information they need to correctly rank providers and the potential pension income they may receive.”
National Association of Pensions Funds chief executive Joanne Segars says: “It is crucial that people get clear information and can make simple comparisons of what is available on the market.
“Currently, consumers are dealing with an unfair and opaque system, which is preventing too many from securing a good retirement income. The ABI’s proposals are a first step in the right direction.”