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ABI: Providers must give customers a 'wake-up' call on pension annuities
14 July 2008 12:00
The Association of British Insurers (ABI) has created a new template for Pension providers to follow in supplying customers with guidance on buying the right annuity.
Under this new procedure, companies will send brief letters to their clients informing them that they may be able to obtain a better deal to the one they offer through the Open Market Option and telling them to seek advice if they are unsure of what to do.
The letter must also explain to customers about the different types of annuity available, as well as including other information such as data on guaranteed annuity rates, protected rights and market value reductions, as and where are applicable.
ABI director of life and savings Maggie Craig said it was vital that customers were aware of their options as buying an annuity is a 'once-in-a-lifetime' choice and it is imperative that they make the decision that ensures they make the most of their retirement income.
She added that the ABI's next aim was to reduce the length of time it takes for annuity payments to be made and that most providers are already participating in an initiative to find ways of doing so, with more details to be revealed on this scheme later this summer.
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