FCA told ‘less is more’ to get annuitants to shop around

The researchers stated including information about the lifetime gains was expected to increase shopping around, as a higher figure might make it seem more worthwhile.

But the research revealed “the additional information may have been ineffective as the prompts contained too much information for the participants to process.”

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Consumers were actually less likely to shop around when the lifetime gains of doing so were added to a personalised comparison of their options.

The research recommended the FCA demand providers include a comparator that should have a significant impact on shopping around.

It pushed for a personalised form that resulted in savers being three times more likely to shop around for an annuity when they were shown the difference that it could make to them.

The FCA stated it will now consult on making changes to the rules requiring providers to highlight the benefit of shopping around for an annuity.