Consumers would be interested in buying money-back annuities, providing they can secure a good deal ...
Consumers would be interested in buying money-back annuities, providing they can secure a good deal in case they die early, says research conducted by the ABI.
Called Annuities - The Consumer Experience - findings of the study were published yesterday at a meeting with DWP, Treasury, Inland Revenue, FSA and insurance officials to reveal almost half (47%) of those questioned would be willing to pay for a reduced annuity rate if they gain a money-back guarantee, similar to products Norwich Union and Prudential are hoping to launch.
That said, those questioned say they do not view their pension fund as a lump sum to be left as part of their inheritance.
IFF research, commissioned by the ABI, was conducted with 500 people who have purchased an annuity in the last 3 years and 101 with people that have retired but have yet to annuitise their pension fund.
Further evidence also suggests there is an advice gap in the annual £6.27bn annuities market, as more affluent customers are more likely to want advice and access to niche products such as impaired life and enhanced annuities.
But a third of interviewees say they are reluctant to pay for advice, even though they need support selecting annuities.
Publication of the research is part of the ABI's campaign to persuade the government to open the annuities sector to new ideas.
Among the proposals the ABI has put forward, officials would like to see changes so a number of different pension funds can be combined to purchase one annuity.
Similarly, the ABI would like see protected rights monies treated the same as other pension fund monies, as proposed in the Pickering report, so only one annuity needs to be purchased.
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