Pension providers have promised to give every customer a chance to speak with them - or an “independent advice or guidance service” - before buying an annuity by 2015, Association of British Insurers chief executive Otto Thoresen has claimed.
Writing for the Telegraph, Mr Thoresen said the insurance industry has committed to implement several changes by 2015, including making sure every customer has the chance to discuss the options available to them at retirement.
Providers have also promised to offer all customers a comparison of annuity quotes illustrating the range of options available to them, and ensure customers can provide information about health and lifestyle which can be used consistently with providers as they shop around.
Mr Thoresen also argued that annuitisation should not be the only option, saying: “The key question is whether people with small pots should annuitise at all, not whether they should have more annuity providers to choose from.
“We would like to see more flexibility for those with pots of less than £10,000 to give more choice at retirement and ultimately improve outcomes for many people.”
Mr Thoresen’s remarks follow findings by the Financial Conduct Authority that the annuities market was ‘disorderly’ and not serving the best interests of many savers.
The FCA also said things were worse for savers with less than £5,000 in their pension pot, half the figure stated by Mr Thoresen in his article.