Aviva tackles annuity market with proposed reforms
by Gill Montia
In a new report, Aviva is proposing a series of reforms within the UK retirement market.
The study contains measures aimed at allowing the industry to better serve the needs of tomorrow’s retirees, highlighting the following: motivating retirees to shop around for the best annuity rates; creating an annuity market fit for the future and addressing customers’ needs.
According to the insurer, most people still don’t know how to get the best annuity for their circumstances, with two-thirds of consumers currently buying the annuity offered by their pension provider.
Aviva also wants the publication of annuity rates to be made compulsory, regardless of whether or not the provider is offering annuities to the whole market.
In addition, the group proposes that basic medical questionnaires are included in all customers’ pension maturity packs, to ensure those who qualify for an impaired life annuity are more easily identified by the industry.
The study goes on to consider the implication of the Retail Distribution Review on annuity advice and also recommends the automatic transfer of small auto-enrolled pension pots, when members move jobs.
Aviva’s “at retirement” director, Clive Bolton, comments: “Wide sweeping social and economic factors are changing the retirement landscape and in response to these trends the Government is introducing radical changes to the state pension system and retirement rules.”
He adds: “The retirement industry must play its part in rethinking its retirement offerings, providing timely and easily understandable advice and information.”