'Force annuity firms to treat all customers equally'

Annuity providers should be forced to offer existing customers the same rates as those given to new customers, a leading insurer has said. 

Aviva called on the City regulator to force all pension providers to offer the same annuity rates to "internal" and "external" customers.

Internal customers are annuity buyers who took out their pensions savings product with the same insurer; external customers saved with a different company before using their pension pot to buy an annuity elsewhere. Those who do shop around are said in industry jargon to be exercising the "open market option".

To read the full article from the Telegraph, open this link.

Enhanced annuities account for only 4% of the direct market

• Enhanced annuities account for only 4% of the annuity market where people stay with their existing provider, compared to 46% where people shop around
• However, up to 70% of people could qualify for a better income due to health or lifestyle conditions
• Over an average retirement, people could be losing out by thousands of pounds in income by not considering all the options available.

Where a customer buys an annuity through their existing pension provider, the number of customers who purchase an enhanced annuity is significantly lower, and yet these are the very people who are more likely to qualify for a better rate through the enhanced route.

Full details can be found in this press release.