The trend of bulk annuity insurers providing improved retirement communications and access to independent financial advisers (IFAs) is expected to pick up speed in 2025, according to Aon.
IFA help upon retirement and defined benefit choices have become standard features of pension plans in recent years. According to Aon’s 2024 Member Options and Support survey, by the end of 2024, almost 40 per cent of schemes intend to provide IFA support.
Improved funding levels and heightened interest in the insurance sector also helped insurers make notable strides in this area in 2024. In the survey, buyout was cited as a long-term objective by more than 54 per cent of schemes.
Aon partner and head of member options and support Kelly Hurren says: “Historically, schemes might have taken it as given that some of the improved support and additional options available to members at retirement would fall away at buyout. But now, trustees are increasingly asking if it’s possible to keep these benefits. In our conversations with them, their unanimous feedback was on the need to focus discussions more heavily on the member experience – and for it to be front of mind for schemes ahead of approaching the insurance market. We’ve been alerting insurers to this situation for the last few years.
“But in 2024 we’ve really started to see insurers develop their thinking in this area. Our survey at the start of the year, showed that half the insurers in the market would consider making options at retirement available. One insurer has gone on to announce that they are offering IFA advice to policy holders after buyout. Professional trustees have also welcomed this development.
“It’s relatively early days on this – but it’s a development we are pleased to see. In our view, it’s a movement that will really kick on, to the extent that it will be the biggest change in the member options and risk settlement space next year. We know a number of large insurers are seriously considering options for offering IFA support post-buyout, so you can expect this area to continue developing – there will be other insurers to follow.”
