People approaching retirement are to be given much greater support to get the best possible annuity income in their retirement.
The Association of British Insurers (ABI) has announced a new Code of Conduct which companies must adhere to once it is introduced on 1 March 2013.
Millions of people are not currently choosing the right annuity for their retirement, meaning they could be missing out on thousands of pounds.
ABI figures show that a 3rd of people do not shop around for an annuity when they reach retirement, while many customers who could qualify for an enhanced annuity, due to medical conditions or lifestyle choices, buy a conventional annuity, which may mean they miss out on a higher income during retirement.
Tom McPhail of Hargreaves Lansdown said that the new rules showed that the industry is 'making real progress in meeting the needs of the hundreds of thousands of pension investors every year who rely on the pensions industry to help them through the retirement process'.
The new code will require ABI members to:
"These changes are a big step forward for customers at retirement and were informed by extensive consultation and consumer research," said Otto Thorensen, director general of the ABI.
"Improved processes, better signposting and transparency will combine to make customers more confident and more able to make decisions about their retirement income.
"This is not the end of our work helping customers to get the best deal at retirement; we will continue to work with key stakeholders including Government and the advisory community to improve the customer experience."
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