View more on these topics

Aviva UK chief David Barral attacks rivals over annuity ‘scandal’

Barral says regulation may need to be strengthened to force people to shop around at retirement.

Aviva UK Life chief executive David Barral has launched a stinging attack on rival providers for exploiting their customers by failing to offer enhanced annuities.

Policymakers are coming under growing pressure to address perceived failings in the annuity market, with an FCA review of annuity profit levels and shopping around due to be published next month.

Earlier this month pensions minister Steve Webb suggested people should be allowed to switch annuity providers if they can get a better deal elsewhere.

Barral says: “There are providers that are exploiting inertia from customers because they do not offer annuities that are enhanced due to medical conditions, so the customer ends up with a really poor deal. We think that is not acceptable.

“30 per cent of the market is about enhancing the annuity based on medical conditions and yet there are companies out there that find it OK just to let the customer buy an annuity from them even if they don’t offer an enhanced annuity. We think that is a complete and utter scandal.”

Barral adds: “We need to force customers into demonstrating they understand the choice they are making and the comparison with rates in the marketplace.”

Hargreaves Lansdown head of pensions research and Pension Income Choice Association chairman Tom McPhail says: “This message about the importance of shopping around is precisely the one Pica has sought to promote these past few years.

“Perhaps now we are seeing even major life insurers actively promoting this agenda, policymakers will recognise the value and importance of restructuring the retirement process.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com