By Bob Cook
With all the talk about the brand-new pension policies coming into force in April 2015, you could be forgiven for believing that the days of the annuity are over. It is fascinating for that reason that on 11th December 2014 the regulatory authority, The Financial Conduct Authority released it’s Thematic Evaluation into Annuities sales practice and the interim guide on the Retirement Income Market Research.
The reports endorse exactly what we have actually long been campaigning for: freedom, choice, fairness and much better results for UK senior citizens. To read the report visit this site.
In 2002, the FSA presented policies requiring insurers to inform their existing pension customers that they might buy an annuity on the free market and to enhance consistency between companies in the method this communication was done.
In 2008 the FSA carried out an evaluation of the wake-up packs sent by companies to their existing pension customers at the start of the retirement customer journey, measuring firms’ literature versus the Open Market Option (OMO) Guidelines.
That review discovered some good examples of literature which clearly set out client’s options, including explaining the prospective benefits of exercising the OMO. Nevertheless, it also discovered that nearly 40 % of firms had material for one or more items that failed to fulfill the requirements.
The FCA states that annuities are a crucial product for the retirement market and that individuals with average sized pension pots are well served by an annuity purchased by means of the Open Market Option. This is specifically appropriate for customers with a low appetite for risk.
The FCA’s biggest concern was where customers were not made aware of enhanced annuities where they approximated that 91 % of customers could get a much better annuity offer.
Over the last 10 years, Best Pension Annuity has supplied a range of retirement products including ensured, safe income, based on individual health, to senior citizens in the UK and abroad.
Is the annuity dead? Like Mark Twain, we think guides have actually been greatly exaggerated. And the FCA’s guides prove it.
It is hoped that this is the start of the removal of inadequate client value, lack of openness and limited choice for those who have not had access to fair information through the Open Market Option.
An annuity is a vital factor to consider for any consumer approaching retirement. Even consumers who are presently in drawdown can switch into an annuity if they want.
For assistance and information please contact Best Pension Annuity on 020 33 55 4827.