Advisers and insurers have backed ABI proposals to force all annuity providers to publish information on the rates they offer to consumers.
Earlier today, 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 next year.
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.
Evolve Financial Planning director James Norton says: “This has to be good news because not shopping around will often have a serious impact on someone’s retirement income.
“Insurance companies are very poor at explaining shopping around to their customers and as a result most people do not realise just how much of a difference moving from one insurer to another can make.”
Informed Choice managing director Martin Bamford says: “This sort of transparency is vital if we as an industry are going to encourage people to shop around for the best annuity rate.”
LV= head of retirement propositions Philip Brown says: “One of the most important decisions people make is about how they structure their income in retirement.
“We have seen a rise in the number of people shopping around to get the highest annuity rate they can and we hope that by making these public it will be easier for more people to shop around, and make an informed decision.”
MGM Advantage pensions technical director Andy Tully (pictured) says: “This consultation signals a move by the ABI and its members to be more open and transparent around the annuity market and should be welcomed.
“It will force providers who currently don’t compete for business in the open market to publish annuity rates which will then easily show where customers are getting good value from their pensions.”