Providers of pensions and pension annuities need to improve the quality, clarity and timeliness of the information they provide to consumers who are about to retire, according to The Association of British Insurers (ABI) in a statement.
The ABI has urged pensions providers to make greater efforts to remind savers of their right to ‘shop around’ when purchasing their pension annuities, and assist them to maximise their retirement income.
In new guidelines published this month, the ABI has requested a general overhaul of the quality and nature of information on pension annuity options provided to those approaching retirement, in the ‘wake-up’ packs they receive from their pensions provider.
The new guidelines echo a similar call that was made by the ABI in the early part of this year, and indicate that pensions providers are still not going far enough to make customers aware of the choice of pension annuity products available to them.
The ABI has requested substantial improvements from pensions providers in six key areas:
- Providers should stress in their communication the importance of the information contained in the wake-up pack
- Make clear the Open Market Option (OMO) or right to ‘shop around’ for pension annuities, and stress the importance and benefits of doing so
- Clarity on the timeline for taking benefits
- Promotion of the Pension Advisory Service’s online financial planner
- A longer lead time for customers than the four or six months’ notice currently given by the arrival of the wake-up pack
- Improvement of the OMO transfer processes
“This new guidance will help ensure people get clear, valuable and understandable information at the point when they are making hugely important decisions about how to turn their pension savings into an income in retirement,†said the ABI.
