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ABI: Annuities market flourishing
13 May 2008 12:00
The annuities market has grown substantially, according to a new Association of British Insurers (ABI) report, while providers have improved their offering to their clients.
Over the past 15 years, the annuities market has trebled in size, with premiums of over £11 billion in 2007 and over 400,000 contracts sold, while this expansion is expected to continue as the number of maturing defined contribution pensions rises.
Moreover, whereas in 2002, four out of five joint life annuitants were on a rate between 85 and 95 per cent of the best rate available, the ABI has found that four out of five of these annuities are now sold at the equivalent of 95 per cent of the highest rate.
Additionally, although two thirds of annuities are still sold externally, the research found that significant efforts were being made to encourage consumers to look around the market, including through improving the information available to them upon retirement.
ABI director of research Rebecca Driver said consumers were benefiting from the wide range of annuities on offer, adding that the aim now is to make them better informed on the options open to them and the key issues they must consider when buying an annuity.
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