The move, unveiled in last month’s pre-Budget report, is part of a Treasury and DWP-sponsored strategy to improve consumer access to the open market option on annuities.
The new website is part of a package of measures to overhaul the annuity-buying process that includes an FSA review of the way insurers implement treating customers fairly principles when they deal with annuity customers and a commitment for the Treasury to report annually in the pre-Budget report on how well the open market option is operating. The DWP will control how the guidance tool works.
But the measures fall short of some stakeholders’ calls for a decoupling of the accumulation and decumulation phases of pensions. Critics have also branded the package, which has come at the end of a year-long Treasury investigation into annuities, as a missed opportunity for innovation in the at-retirement market.
Mike O’Brien, pensions minister says: “It is important that the new savings from personal accounts translate into good value from the annuities market. The structured choice and information products will enable individuals to make annuity decisions that reflect their individual circumstance. The Personal Accounts Delivery Authority will be taking the outcome of this review into account when deciding its processes.”
Iain Anderson, a spokesman for the Retirement Income Reform Campaign says: “As the debate moves towards personal accounts increasing numbers of people are going to be heading down the defined contribution route. If the government is going to be sensible about encouraging people to save, they need to offer greater flexibility at retirement. But after this announcement innovation seems as far away as ever.”
