The ABI has announced plans to explore how the mass market can benefit from the simplification ...
The ABI has announced plans to explore how the mass market can benefit from the simplification of the annuities advice process. The comments came today in response to the Government's 'Modernising Annuities' consultation paper.
The ABI urged the FSA to consider streamlining the regulation of retirement advice and has set up a working group to explore whether a standard annuity model, suitable for the mass market, could be developed, together with a decision tree and simple information. The ABI hopes this generic advice could help consumers identify an appropriate annuity for them and then shop around for a good rate.
The ABI also stressed the importance that consumers choose the right annuity for their circumstances and then exercise the open market option to get the a good rate for that annuity. One way to facilitate this, suggests the ABI, would be to make advice less expensive and more accessible.
Alan Woods, head of life and pensions at the ABI said: "Annuities are an excellent product, ensuring that people don't outlive their savings. However, with the average annuitised fund valued at £23,000, and only 25% of people currently exercising the open market option, it is vital that we develop ways to help more consumers access the choice and excellent value for money that is already exists."
"As well as considering whether decision trees could help, we are currently looking at how work-place based advice can be used to both encourage more people to save for retirement in the first place and to provide access to advice at retirement," added Woods.
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