Pension Income Choice Association chairman Tom McPhail says the Association of British Insurers’ code of conduct for annuity providers falls a “long way short” of Pica’s goal of making the open market option the default.
This week, the ABI announced it is introducing a compulsory code of conduct forcing providers to remove the annuity application form in the communications they send to customers.
The initiative has been announced as part of ongoing efforts by the industry and the Government to increase the number of people who shop around at retirement.
The move will stop consumers automatically rolling their savings into an annuity with their current provider. The trade body says the new code will also ensure consumers receive all the information they need to shop around in one place.
ABI director of life and savings Maggie Craig says: “The Association of British Insurers believes all consumers should shop around to maximise the income from their pension savings.
“However, not enough people shop around currently. This new industry initiative has been developed to make a significant difference to people’s retirement outcomes.”
But McPhail says Pica will continue to lobby for shopping around to be the default option at retirement.
He says: “What the ABI has proposed falls a long way short of what we would regard as an acceptable outcome. We will continue to work with the DWP, the Treasury and the ABI to put together a more far-reaching solution.”
Radcliffe & Newlands chartered financial planner Mel Kenny says: “This initiative is a step forward. I have seen some retirement option packs that make only a fleeting reference to shopping around at retirement.”