ABI: new guidance on annuities

by Gill Montia

Story link: ABI: new guidance on annuities

The Association of British Insurers (ABI) has published a new Best Practice Guide for the Retirement Process, which sets out the principles pension providers need to follow, plus the key requirements they must meet, to help customers purchase the right annuity for their circumstances.

According to the ABI, the guide makes it clear that providers should actually encourage customers to shop around, sending all the information they need four to six months before they retire, and with no default automatic annuity offer made until six to 10 weeks before the retirement date.

The Association’s acting director of life and savings, Helen White, says: “With nearly half a million people expected to buy and annuity this year, it is hoped the guidance will have an impact on a great many of consumers.”

The ABI is in the process of producing a template “shopping around” form for customers, which will eventually form part of the new guidance.

The body also reports that the average time taken to transfer funds between pension and annuity providers continued to fall during 2010, typically taking just 10 calendar days.