View more on these topics

Thinktank proposes advice for all before buying annuity

An influential pension consultant is putting forward a plan for everyone to get independent financial advice before buying an annuity.

Thinktank Pension Policy Institute governor Dr Ros Altmann has suggested to Downing Street and the Treasury that providers should push all pensioners through an independent advisory process before they buy an annuity.

The proposal is understood to be under serious consideration by Government officials.

Altmann says annuity contracts already carry a 1-1.4 per cent charge for commission but most people do not take any advice or use the open market option.

If policyholders do not want advice, Altmann wants providers to show their own rates alongside the best rates on the market to press individuals to get a better deal.

She suggests annuities should extend “moneyback guarantees”, which will protect at least some of the investor&#39s capital in the event of death. She says guarantees can be offered at a cost of up to 16 per cent by the age of 75 on figures costed by one provider.

The Bureaux director Ronnie Lymburn says: “One of the problems with annuities is that the pricing is obscure.”

Britannic Retirement Solutions corporate development director Bob Bullivant says: “The problem at the moment is that it is easier not to exercise the open market option than to exercise it. But 1 per cent does not give you enough room for full advice so we need to simplify the system.”

Altmann says: “The ideal is that everyone gets independent financial advice but it does not have to be complex advice. There are basic questions people need to consider.

“The funding for advice is already there. At least two in three people do not exercise their Omo but they are paying for advice.”

•Comment, p37


Life&#39s a Peach as internet firm offers group cover

A virtual life office selling group protection products and targeted at IFAs is being set up by two ex-Canada Life employees.Peach Global Financial Solutions aims to remove barriers such as poor customer service and long delays in getting quotes.Its online service goes live next week with its group risk scheme the all employee protection plan, […]

Fewer first-time buyers in market

The number of first-time buyers is falling and they are getting older, according to research from Halifax.The average age of FTBs has risen to 34 in 2001 from 29 in 1974 and the number of homebuyers aged under 25 fell to 11 per cent in 2001 from 32 per cent in 1988.The number of FTBs […]

Playing the yield

Mrs W is in her late 60s, a widow with no dependent children. She has been retired for some years and her only income comes from her state pension and her investments. She has money in a building society account, on which she has suffered a severe drop in interest, and a share portfolio which […]

Two new buy to let products from Pink

Pink Home Loans is adding two new products to its buy to let range.Pink is offering a 1.23 per cent discount for three years off an underlying rate of bank base rate plus 1.98 per cent, giving an initial rate of 4.75 per cent, with an arrangement fee of £395.An initial rate of 5.47 per […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    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