Annuity rates should be made public

Posted on May 27th, 2011 | Categories - Annuities

Publishing Annuity rates would allow those nearing retirement to secure the best deal.

Medical details should be mentioned by retirees to make sure they qualify for an enhanced or impaired life annuity.

Insurers should publish their retirement product Annuity rates to give customers a fuller picture of the options open to them before they reach pension age, Aviva has urged.

The insurance firm said that its competitors are preventing customers from being able to shop around for an Annuity by failing to publish their facts and figures.

A spokesperson for the company said: “Aviva wants the publication of annuity rates to be made compulsory, no matter whether the provider is offering annuities to the whole, ‘open’ market, or takes a ‘closed’ approach by only serving the customers that have saved for a pension with them. Aviva also proposes that examples of the best market rates are highlighted to soon-to-be retirees when the annuity they are being offered by their pension company is 10 per cent less than the best rates available in the market for the same type of product”.

The firm highlighted that just under a third of retirees choose to buy their Annuity from a different provider and not from the one they have their existing pension with. The remaining number stick with their initial provider even though they may not offer the best rate.

Aviva wants to improve Annuity value and boost the customer’s right to scour the market for better deals. It also wants medical questionnaires to be included in retirement packs “to ensure those who qualify for an enhanced or impaired life annuity are more easily identified by the industry so firms can automatically offer them a tailored annuity”.