Insurance experts have launched a new service to help people approaching retirement to get the best annuity deal.
The Association of British Insurers (ABI) is now publishing specimen annuity rates offered by its members to highlight the importance of shopping around for the best deal. Over 400,000 people buy an annuity each year, and getting the right deal can mean thousands of pounds more income during retirement.
The information published by the ABI is based on 12 example customer profiles. It is not a price comparison but is designed to show what is available in the market and to highlight the need for expert advice. The illustrations will be updated regularly.
Launching the new service on 21 August, ABI director general Otto Thoresen said: “Increasing life expectancy and an era of low interest rates makes the need to secure an adequate retirement income greater than ever. The industry is determined to do all it can to help people make the right decision to secure the best possible pension.”
Karen Barrett, chief executive at the unbiased.co.uk website, which helps consumers to find professional advisers, welcomed the launch of the specimen rates table but stressed the importance of expert advice.
She said: “There is a clear benefit in people taking time to review their options when it comes to their annuity purchase but we also recognise that many people simply won’t be able to confidently choose the best option for them. A general ‘shopping around’ message simply doesn’t go far enough.
“The demand for financial advice has never been stronger and we have seen a nine per cent uplift in consumer searches for advice in the first four months of 2013 compared to the same period last year. We also know that retirement planning has always been the biggest trigger for people seeking advice, so it is clearly an area where people appreciate the need for professional advice.”
The table of specimen annuity rates is available at www.abi.org.uk/annuities