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ABI under fire for removing 10-day target on annuities

Hargreaves Lansdown has accused the Association of British Insurers of abandoning its commitment to customer service by ditching its 10-day turn-round target for open-market annuity processing.

The ABI’s guidelines stated until recently that members should aim to process member requests for investment redemptions within 10 working days.

The guideline has been replaced with what Hargreaves Lansdown says is a less stringent requirement on paying out funds by the selected retirement date. It claims that no formal announcement has been made by the ABI and some of its members were unaware of the change.

Pension analyst Nigel Callaghan says: “We are deeply disappointed by the ABI’s action on this issue. The retirement boat is sinking and the ABI is not so much rearranging deckchairs as banging away at the hull with an axe in the belief that it will let out the water. There is no reason why its members cannot settle transactions within five days. The unit trust industry can do it, so why not insurers?”

ABI spokesman Jon French says: “The ABI believes the new guidance is more stringent and gives customers more certainty about when their payments should start. 

There was a wide consultation on the new guidance with member companies and all relevant ABI member companies have been informed of the changes.”

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