Drawdown customers misled by 'unrealistic' yields

The firm's CEO, Bob Bullivant, says insurers are making inaccurate assumptions when offering these products to consumers. Currently, the FSA requires drawdown providers to calculate a type A critical yield for the potential customer. The critical yield is intended to indicate the rate of investment return needed to match a typical annuity rate. However, Bullivant says many insurers are basing these calculations on their own rates, which may not be market leading, and often fail to take smokers or enhanced annuities into account. "The problem we have today is that insurers quote ...