Research from Better Retirement Group reveals double-digit price differentials between the first and fifth best annuity provider following news of a single-tie deal between Openwork and Partnership which commits the provider to top-five rates.
Last month, Partnership confirmed a single-tie deal with Openwork to provide both standard and enhanced annuities to the network offering top-five annuity rates.
Analysis from Better Retirement Group shows the difference between the best conventional rate and the fifth-best on a £50,000 pension pot is currently 12 per cent. The split between the highest enhanced annuity quote and the fifth highest is also 12 per cent.
Better Retirement Group director Billy Burrows (pictured) says: “The top-five quote guarantee is meaningless. The difference between the best annuity rate and the fifth-best is 12 per cent at today’s prices. This type of deal just feels wrong. The industry is working its socks off to encourage people to shop around for the best rate.”
Aviva head of retirement Darren Dicks says: “There are only three active providers in the conventional annuity market and four or five in the enhanced market.”
Openwork proposition and marketing director Philip Martin says: “Our challenge is to ensure customers with smaller pots can be economically serviced after the RDR. It is not clear to us how an adviser can undertake a full Omo exercise with an appropriate charge for a client with a small pension fund.”