The initiative from the ABI is a positive one and long overdue. It highlights the importance to pension holders of the need to shop around to get the best income for their potential circumstances.
Doncaster, Yorkshire (PRWEB UK) 30 August 2013
Around 400,000 people purchase an annuity each year, according to the ABI, and choosing the right one can mean the difference between thousands of pounds more income during retirement. Since 2002, pension providers have been required to disclose to savers that they can shop around for an annuity rather than accept the rate offered by their provider; however, only around 40% of over 55 take advantage of the Open Market Option and secure themselves the best deal.
This new initiative from the ABI announced on the 21st of August, will publish its members' annuity rates based on 12 example customer profiles which it plans to update regularly. It is a move that aims to improve the levels of transparency in the pensions market, although consumers are advised to treat the data with caution as they are fictitious rates, not real time rates which can change from minute to minute. The samples also don't include companies that aren't ABI members and therefore don't take into account the entire market. Customers who want up to date, personalised quotes are advised to get in touch with a financial expert who can advise them on what their best options are.
"The initiative from the ABI is a positive one and long overdue," Andy Binns of My Pension Expert comments. "It highlights the importance to pension holders of the need to shop around to get the best income for their potential circumstances. Customers shopping around will give themselves the best opportunity of improving their income for the rest of their retirement and potentially providing themselves with a degree of flexibility for the future. The most important aspect of sourcing the best income in retirement is to shop around and always take some advice from an Independent Professional Source."
My Pension Expert is a company of Diploma Qualified Financial Advisors specialising in options at retirement.