Partnership enters annuity deal with Openwork
Product provider applauds Pica’s work but says more needs to be done to encourage people to shop around.
Partnership is to become the sole standard and enhanced annuity provider for Openwork, in order to help ensure that consumers get a “decent rate” at retirement.
Nigel Barlow, director of product development and marketing at Partnership, told FTAdviser that Openwork has reviewed its system and is working with Partnership to help “marry up technology” to give a smoother experience for the client to get a better deal.
He said: “This is one way of helping people to shop around. Going forward next year there will more people with smaller pension funds and potentially advisers may be leaving the adviser space.”
Under the terms of the deal, Partnership must remain in the top five annuity providers in terms of rates.
He said: “There is a big commitment for both sides going into this. We want to make sure our rates remain competitive. The last thing you want is that consumers are not getting a decent rate.”
Mr Barlow believes that post-Retail Distribution Review there will be a development of “all types of solutions” by other providers.
He said: “Some advisers will feel that they can give advice with smaller funds, as they are doing at the moment, but the thing we notice is that between 60-70 per cent of consumers should be on an enhanced annuity but only 8 per cent are getting one.”
Mr Barlow applauded the work that the Pension Income Choice Association has done. Last month, the association revealed plans to develop an adviser register to make it easier for consumers to find an adviser in their area that can offer advice on shopping around for at-retirement products such as annuities.
Mr Barlow said: “Pica has done excellent work around this but only a third of people are shopping around. Organisations will adapt to different styles to set systems and deal with customers as they see fit. We are already seeing some discussions around panels in the IFA space and they are looking into a number of ways to help improve shopping around.”