ABI issues new guidance on annuities

by Gill Montia

Story link: ABI issues new guidance on annuities

The Association of British Insurers (ABI) is continuing its campaign to improve the public’s awareness of annuity options.

The industry body has plans to target people nearing retirement age with information that highlights the benefits of shopping around for an annuity and potentially increasing their retirement income.

The ABI’s director of life and savings, Maggie Craig, points out that buying an annuity is a once in a lifetime decision that cannot be changed and the new ABI guidance summarises a number of important issues, including the Open Market Option and the different types of annuity available.

Earlier this year the ABI began petitioning the Government for changes in the annuity regime.

It wants to see the age at which investors must cash in their pension savings, in return for the regular income provided by an annuity, lifted from 75 to 80.

The ABI asserts that many savers resent being forced to buy an annuity, and would rather continue managing their pension pot in a live fund.

The body is also calling for restrictions on guaranteed annuities to be lifted to overcome the problem of savers investing their money in an annuity one day and dying shortly afterwards, leaving the insurance company to retain their savings.