Aspen annuities director Billy Burrows has weighed in to the debate over third-way products, saying the UK market is ready for them and that not offering them to customers is denying them choice.
In Money Marketing last week, Hargreaves Lansdown head of pensions research Tom McPhail criticised flexible annuity products for being overpriced and over-complicated, offering the worst of both worlds.
Burrows says: “To dismiss them offhand is not taking a balanced approach and not to put it forward as an option is to deny people choice.
“I would be one of the first to admit that there is a big difference between the US and UK but people essentially have the same problems.”
But Annuity Direct managing director Stuart Bayliss says: “Saying we need an alternative is all very well but it does not mean the alternatives offered are any good. These are a quick and easy fix, with no real detailed research or thought gone into them. Apart from the Living Time product, it seems as if the rest were created through focus group product development. They are certainly in need of evolution.”
Burrows says: “I am not saying people should put all of their money into these third-way products but as part of a balanced retirement plan they should consider putting part of their pot into them. Yes, charges are important but it is only part of the overall package. I think over time, IFAs will embrace them.”