The National Association of Pension Funds (NAPF) has submitted its response to the ABI’s consultation on annuity rate transparency. The ABI has sought feedback on its initiative to increase the transparency of annuity rates offered by its members. It is building on the Code of Conduct on Retirement Choices, which the ABI published in March.
The initiative includes a regular survey on notional annuity rates set by providers, which will be posted on a consumer-friendly webpage and will be accompanied by specific information on the annuity products that providers offer. It is expected to be an important tool for the code that will be implemented next year.
Mel Duffield, NAPF Head of Research, said:
“We support the ABI’s consultation as we have been asking for greater transparency in annuity rates and pricing for some time.
“The ABI’s proposals are a step forward, and are likely to make it easier to scrutinise current pricing practices and see which providers are the most competitive for different types of annuity.
“At this stage it is not clear to what extent the annuity rate tables will directly help consumers, but the proposals provide an initial framework from which to build on.
“We believe that more needs to be done to help savers shop around for the best annuity. Currently, our opaque and complicated annuities system is preventing too many savers from getting a good retirement income. Consumers need to get clearer information and must be able to make simple comparisons on what is available on the market.
“We would like the proposals to go further and make annuity provider’s retention rates available. This is a crucial piece of information to help the Government monitor and evaluate the impact and effectiveness of the ABI’s code and the use of the Open Market Option.”
Notes to editors:
1. The NAPF is the leading voice of workplace pensions in the UK. We speak for 1,300 pension schemes with some 16 million members and assets of around £900 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector.
Paul Platt, Head of Media and PR, NAPF, 020 7601 1717 or 07917 506 683, [email protected]
Christian Zarro, Press Officer, NAPF, 020 7601 1718 or 07825 171 446, [email protected]