Make scheme transfer system ‘more equitable’

Mr Bullivant, chief executive of Isle of Wight-based Annuity Direct, said a common discharge form for pension scheme transfers would speed up the process and deliver better outcomes for consumers.

Under the existing system, each provider has its own form, often requiring original documentation and taking 10 to 12 working days to process.

He said: “I cannot believe this is the case in 2012. Providers must give better and faster information to consumers. Only when this happens will the open market option really work and the Association of British Insurers can say the job is done.”

Mr Bullivant made the comments during a retirement conference hosted by the Tax Incentivised Savings Association.

Malcolm Small, director of policy and chairman of Tisa, agreed with Mr Bullivant and pleaded with providers to step up to the challenge. He said Tisa might even test the appetite for a pan-industry project to tackle the issue.

He said: “A common discharge form will save us all money. Unless we can get it done we will not crack that problem. It is delivering rotten consumer outcomes.”

Mr Bullivant went on to outline other retirement issues facing advisers and clients.

When it comes to buying an annuity, Mr Bullivant said the existing process was inefficient. The difference between the best and worst annuity rates is so significant that people can lose tens of thousands of pounds by making the wrong decision.

He said: “There is no education and the open market option is still written in terrible jargon, so it is no wonder more than 50 per cent sign up for less money for the rest of their lives.

“One life company automatically switches customers to cash if they ask for an open market option form. Where is treating customers fairly in all of this?”

Another retirement product Mr Bullivant said was an “obvious” solution was equity release. However, he said people still talk about it as a distressed purchase when in fact it should be part of a good retirement plan.

He said: “The other problem is some IFAs love it, while some hate it. There is no common view and even the FSA tends to see it as high risk. The product will take off. The question is when.”