The Association of British Insurers has published a best practice guide which it says will see providers encourage customers to shop around for an annuity.
The guide tells providers they should encourage customers to shop around for the most competitive annuity and customers should get all the information they need to shop around four to six months before they retire. No default automatic annuity offer should be made until six to 10 weeks before their retirement date.
ABI acting director of life and savings Helen White says: “This guide cements together best practice so customers can be confident they have all the information they need to help them make an informed choice.”
Pension Income Choice Association chairman and Hargreaves Lansdown head of pensions research Tom McPhail says: “Improving the open market option will not solve the problem because Omo is the problem. Shopping around should be the default for all investors rather than an option added on as an afterthought.”