§ Mr. BoswellTo ask the Chancellor of the Exchequer what plans he has to publicise open market annuity options to savers and financial advisers. [40890]
§ Ruth KellyThe FSA already draw the attention of annuitants to the advantages of the open market option in their explanatory material for those buying a pension annuity.
In addition, the FSA has consulted recently on proposals that firms should be obliged to tell their personal pensions customers, at an appropriate time before their retirement, that their annuities can be bought from a different provider firm. This proposal is designed to ensure that consumers are made aware of their right to shop around to get the best annuity deal on offer to suit their circumstances.
The FSA's consultation process (which started in August 2001) recently closed. The FSA plans to publish the results of the exercise, with its decisions on next steps, shortly.
473WThe Association of British Insurers (ABI) issued, also in August 2001, a "Statement of Good Practice for Pension Maturities".
The ABI standards give further detail about how in practice provider firms offering pension saving and income products should communicate with their customers. The guidelines should ensure that customers are more aware of the choices available to them when they begin their retirement, and are thus able to make more educated choices.
The Modernising Annuities consultation paper published by the Inland Revenue and Department for Work and Pensions in February 2002 also explains how exercising the open market option can help pensioners get better value from their pension savings. It discusses how those benefits might be more widely understood, and whether there are any further steps that might be taken to encourage people to use the open market option. The Government are keen that those with an interest think creatively about this and other ways that the annuities market might be made to work better, and would encourage those with views to submit responses to the consultation.