Pension providers will ensure all savers coming up to retirement have a conversation with their staff or an impartial source of advice or guidance about retirement options, under ABI plans.
Writing in The Sunday Telegraph, ABI director general Otto Thoresen admitted insurers needed to do more to help pension savers receive better retirement incomes.
Alongside its Retirement Choices Code, launched last year, members will have to abide by the following rules to be put in place by next summer to:
- Ensure every customer has a conversation with their provider or an impartial advice or guidance service about their retirement options.
- Proactively offer all customers a comparison of annuity quotes so they can see the range of options available to them.
- Make sure customers can provide information about their health and lifestyle, which can then be used consistently with all providers as they shop around.
Thoresen writes: “The FCA’s competition study is going to take a year. And once the FCA recommendations are made there will inevitably be a period of consultation before the industry can start to respond. We plan to write to the regulator outlining our plans next week as we want to get on with improving things now.
”We strongly believe these changes can make a difference and we intend to act.”
The FCA’s thematic review, published last month, found that 80 per cent of people who buy an annuity from their existing provider would be better off if they shopped around and switched provider.
The regulator is now investigating insurers’ sales and retention practices as part of a 12-month review of competition in the annuities market.
However, writing recently in Money Marketing, FCA director of long-term savings and pensions Nick Poyntz-Wright warned insurers not to wait for the results of the competition review before acting to tackle some of the concerns exposed by the regulator.
To watch on demand versions of last week’s MM Wired live TV debates on annuity reform, featuring Poyntz-Wright, Labour shadow pensions minister Gregg McClymont and others, click here.