You are here: Home - Retirement - Retirement planning - News -

New annuity rules have ‘fundamental flaws’

0
Written by:
22/02/2018
New rules from the UK’s financial regulator designed to encourage improved comparison rates for retirees looking to buy an annuity have ‘fundamental flaws’, according to Retirement Advantage.

The new rules go live on Thursday 1 March 2018. They set out a specific template where providers will need to show like-for-like rates when producing annuity illustrations.

Retirement Advantage has warned that consumers may still not get the information they need: quotes may only provide standard annuity rates, for example, which will not factor in health or lifestyle information, and therefore annuity comparisons on a like-for-like basis will also not include any medical details.

The Financial Conduct Authority (FCA) has previously found that 80% of people who purchased an annuity from their existing provider could have received a better deal by shopping around on the open market. Retirement Advantage said up to 70% of people could qualify for a better income in retirement because of health or lifestyle and yet the majority of people do not shop around.

Andrew Tully, pensions technical director at the group, said: ‘These changes, although introduced with the best intent, will not improve the outcomes for thousands of people who continue to value the security of a guaranteed lifetime income from an annuity. Significant flaws remain where quotes produced on limited information will not highlight the true value of the annuity, and may well result in people locking into uncompetitive deals.”

The annuity market is expected to be worth around £4bn in 2017 with 40,000 customers looking to secure a lifetime income.

Top tips to get the best annuity deal

Retirement Advantage gives the following tips:

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

It’s time to get your finances in shape for summer, and moving your cash savings to a higher paying deal is ...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Inquiry launched into cryptocurrencies

An influential group of MPs have launched an inquiry into digital currencies such as Bitcoin and the technology behind virtual...

Close