The Association of British Insurers (ABI) is to publish specimen annuity rates offered by its members to highlight the importance of shopping around for the best deal when it comes to buying an annuity.
The publication is part of the ABI’s Code of conduct on retirement choices, which was launched in March.
The specimen annuity rates, which are based on 12 customer profiles. are designed to show people the rates that are available in the market, and highlight the need for them to get expert advice.
Otto Thoresen (pictured), director general at the ABI, 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. The [code] will help people approaching retirement have the confidence to make the right pensions decision.”
Tom McPhail, head of pensions research at Hargreaves Lansdown, added: “This is a welcome development. With the demise of guaranteed final salary pension schemes, millions of people now have to rely on their private savings to deliver a decent standard of living in retirement.
“It is highly unlikely that their existing pension provider will offer them the best deal, so shopping around is absolutely vital. Pension savers have to make sure that they get the best possible annuity and even consider whether they want to buy an annuity at all.
“The ABI should be applauded for taking this initiative, however, there is still more work to be done to make sure every defined contribution pension investor quickly and easily shops around for the best deal as a matter of course.”
