Annuities market is in need of more innovation

Henry Cobbe

We believe there is scope for innovation in five key areas that could create greater choice, efficiency and transparency for at-retirement decisions:

1) From index providers: annuity reference benchmarks so open-market quoted rates can be presented relative to a transparent and consistent benchmark;

2) From asset managers: designing the investment and administration capacity for collective drawdown schemes as an alternative to annuities;

3) From providers and/or investment banks: fixed-term non-life portable guaranteed income products as an alternative to life-assured annuities;

4) From annuity brokers: standardised and consistent fee presentation;

5) From legislators and regulators: review of legislation to ensure any such improvements can be accommodated.

Any parties wishing to participate in some much-needed creativity in this area are invited to contact us to join an industry-led initiative.

Henry Cobbe

Managing director

Elston Consulting