The Campaign for Better Annuities The Campaign for Better Annuities launched to financial advisers in the summer of 2007. Its purpose was to raise awareness that tens of thousands of people that retire each year potentially miss out on what can be a significant amount of income in retirement, simply because they don’t shop around to find an alternative provider for their annuity income.
Based on Association of British Insurers (ABI) data and our estimates, over 150,000 people each year still take the annuity offered by their pension provider. By exercising what’s known as the Open Market Option, it can make a difference of around 28% of a persons’ income for the rest of their life. Over ten or twenty years, this can mean thousands in lost income.
The campaign was a success – not only because it won a number of marketing accolades, but also because thousands of financial advisers signed up to it to promote the interests of customers and secure them a better income in retirement.
Majority Campaign Launched in 2010, this campaign highlighted to advisers that the majority of people looking to secure an income in retirement could qualify for an enhanced annuity. Previously it had always been the belief, now proven to be misconceived, that enhanced annuities were only for the minority of people.
In fact, our research shows that 6 out of every 10 customers looking to secure an annuity qualify for some type of enhancement – often for the mildest health conditions or lifestyle factors such as smoking and drinking. And since enhanced annuities can provide an increase of between 10% and 40%* - sometimes even higher - in income compared to the lowest standard annuity, this can add up to thousands of pounds over the course of retirement.
Face Facts Campaign This campaign launched in the autumn of 2008 to emphasise the needs of customers in retirement and how they continue to miss out on lost income – either because they don’t shop around for their annuity, or because they qualify for an enhancement but are purchasing standard annuities.
We believe the facts speak for themselves and wanted to highlight to those influencing customer purchasing decisions that spending a little extra time shopping around, or answering questions on health and lifestyle can mean a significant improvement in the quality of life in retirement.
Fill the Gap CampaignThis campaign launched in the autumn of 2009 to highlight to advisers the growing disparity between customer expectations of their income in retirement and the reality. The retirement income gap will continue to grow through the dual influence of an ageing population and under-provision for retirement.
Additionally, given market conditions at this time, many customers were experiencing significant falls in the value of their pension pots. Choosing an annuity that provided the maximum level of income possible and taking into consideration all assets at retirement, including property, became even more essential.
Lobbying for change Our lobbying work focuses on ensuring government and political parties make changes to the retirement legislation that benefits individuals. We respond to all Her Majesty's Revenue and Customs consultations in this area and work with industry bodies and regulators such as the Association of British Insurers and the Financial Services Authority.
Promoting safer equity release We are a founder member of the equity release trade body Safe Home Income Plans (SHIP) whose aim is to educate consumers and provide safeguards to protect those who take out equity release plans.
* Based on a male aged 65, with a £45k fund, 5 years guaranteed, no escalation, no value protection, based on RH2 7RU postcode, compared to the lowest standard annuity rate offered via Avelo Exchange on 16.12.11.
Useful links FSA paper on retirement planning for the over 50s