The Money Advice Service has come under fire after Money Marketing exposed a flaw in its enhanced annuity comparison tool which means it does not produce quotes from two of the UK’s largest providers.
The MAS annuity comparison tool allows users to input lifestyle and medical conditions in order to obtain tailored quotes from a range of pension providers.
However, when Money Marketing tested the tool last week it did not provide rates from Just Retirement and Partnership, two of the UK’s biggest enhanced annuity specialists who often offer some of the highest rates.
According to Annuity Direct, a 65 year old male smoker with a £100,000 pot who has high cholesterol and high blood pressure could miss out on £400 per year in retirement income if they use the tool to shop around for providers, due to the exclusion of Partnership.
Annuity Direct chief executive Alan Higham says: “People who thought they were being smart by using the MAS tool to self-serve could end up with a sub-standard annuity.
“The MAS should partner with IFAs to share costs of a great self help annuity portal backed up by accredited advisers for those who need it.”
Annuity Line head of business development Billy Burrows says: “People see the MAS as an authoritative source of information, so the risk is savers will have been misled into buying the wrong annuity.”
A MAS spokeswoman says the problem originates from the wholesale provider it uses, whom it declined to name. Partnership rates were available until earlier this year whilst Just Retirement rates have never been available. It is unclear when the fault will be fixed.
Following Money Marketing’s exposure of the flaw last week, the MAS says it will now add a message to its annuity tables highlighting that they represent information from a panel, rather than the whole market. The MAS has also amended its previously mandatory gender field for annuities after it was pointed out that this was no longer necessary due to last year’s European gender neutralisation changes.