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Labour calls for mandatory annuity broker referrals

Gregg McClymont
Labour shadow pensions minister Gregg McClymont

Labour is pressing the Government to introduce a new duty for pension schemes to direct savers to the “best independent brokerage service available” when they reach retirement.

Earlier this month, Hargreaves Lansdown head of pensions research Tom McPhail called on the Government to “hard-wire” minimum shopping around standards into automatic enrolment pension rules.

Labour shadow pensions minister Gregg McClymont wants the Government to force pension schemes to either direct savers to an independent annuity brokerage service or offer one themselves.

He says: “More and more people are waking up to the scandal of annuities rip offs, but ministers are still sitting on their hands.

“This Tory-led Government has brought forward a Pensions Bill that is just half a reform. For changes to the state pension to really work, the private pensions system must deliver value for money.

“Savers can lose a fifth of their pension income because the market simply isn’t working. Ministers must now act on private pensions and ensure that there is fairness in the system – including in the purchase of annuities. 

“It should be part of the duties of pension schemes to direct their savers to the best independent annuity brokerage service available or to offer such independent brokerage services themselves.”

The pensions industry has already moved to increase the number of people who shop around at retirement, with the Association of British Insurers launching a compulsory code of conduct for its members in March this year.

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Its not difficult to do this,but the politicians and media have spent so long now telling the public that advisers are “commission hungrly salesmen” and that their fees will wipe out large chunks of their pension that they do nothing! The advisers are all their waiting to help these people but the politicians seem to think it should all be done for nothing by advisers.Unfortunately they forget we are in business and need to feed our families too and unlike Peter Hargreaves and his cohorts we are not all multi millionaires.

  2. It is a simple thing to do.

    Unless a contract includes guaranteed annuity rates the existing providing should be banned from offering the individual a pension directly.

  3. Julian Stevens 27th June 2013 at 9:15 pm

    Given that central elements of the FCA’s remit are (so we’re led to believe) to make the market work better, to promote the best possible consumer outcomes and to ensure best value for money, one wonders why we hear virtually nothing from that quarter and why there seems to be a stubborn tacit resistance to making OM the default option.

    Could it be that the FCA is barred by higher powers from actually doing or saying anything implying that an independent or WoM financial adviser is the best choice to achieve the above objectives? It certainly looks like it.

  4. If MP’s and Civil Servants pensions were Money Purchase all these issues would disappear overnight. In the meantime it’s a lot of hot air.

  5. Do you ever find yourselve wondering ” how many thieves, liars and cheats do I actualy come across each day” and I’m not talking about my fellow Financial advisers. Cash for questions, lobbyists MP’s and other high ranking Govt officials just cant keep their snouts out of the trough. Thats what we’re all really up against. So dont be surprised when decisions are made that baffle you when common sense suggests the opposite view.

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