MSE News: Pensions firms face competition probe over annuities

dunstonh

zagfles wrote: »

What, never? I'm surprised - surely anyone who has any sort of life expectancy affecting health issue would want to make sure that anyone providing an annuity quote has full details.

Sadly not. The annuity providers go out of their way to help "train" advisers in getting information but they cant do that with those going DIY.

bmm78

zagfles wrote: »

What, never? I'm surprised - surely anyone who has any sort of life expectancy affecting health issue would want to make sure that anyone providing an annuity quote has full details.

Sounds bonkers, but unfortunately all too common:

- Some are still locked-in to the mindset that you don't over-disclose medical info, and fail to recognise that annuities are like life insurance in reverse.

- Some find it difficult to disclose information that may cause an underwriter to assess them as having a reduced life expectancy (not a pleasant thing to hear)

- Some fail to disclose things that they think are unlikely to give them a uplift.

- Some fail to provide the level of depth that is needed to get the highest uplift. For example, diagnosis dates, specific readings, full list of medications, supply medical reports where needed etc.


The latter point is very significant - one enhanced annuity provider apparently has 15 levels of underwriting (higher levels giving potentially higher uplift). If the medical questionnaire is incomplete and doesn't disclose all information, it defaults to Level 3 being the limit.

The skill of the broker can often make a difference the further along the enhancement scale you go. For standard and lower levels of enhancement it is less significant.

zagfles

bmm78 wrote: »

Sounds bonkers, but unfortunately all too common:

- Some are still locked-in to the mindset that you don't over-disclose medical info, and fail to recognise that annuities are like life insurance in reverse.

- Some find it difficult to disclose information that may cause an underwriter to assess them as having a reduced life expectancy (not a pleasant thing to hear)

- Some fail to disclose things that they think are unlikely to give them a uplift.

- Some fail to provide the level of depth that is needed to get the highest uplift. For example, diagnosis dates, specific readings, full list of medications, supply medical reports where needed etc.


The latter point is very significant - one enhanced annuity provider apparently has 15 levels of underwriting (higher levels giving potentially higher uplift). If the medical questionnaire is incomplete and doesn't disclose all information, it defaults to Level 3 being the limit.

The skill of the broker can often make a difference the further along the enhancement scale you go. For standard and lower levels of enhancement it is less significant.

Yes I suppose it makes sense to use a specialist annuity broker if you have health conditions, but don't want financial advice:

https://www.moneyadviceservice.org.uk/en/articles/how-to-shop-around-for-an-annuity

dunstonh

Yes I suppose it makes sense to use a specialist annuity broker if you have health conditions, but don't want financial advice:

But again, we have seen that the online sites dont offer as good rates as advisers. Also, most of these so called annuity specialists are nothing of the sort. They have multiple websites that proclaim expertise in all areas.

We should also note that the regulator found faults and misinformation with every annuity website it checked in the review. Not what you would expect from so called specialists

zagfles

dunstonh wrote: »

But again, we have seen that the online sites dont offer as good rates as advisers. Also, most of these so called annuity specialists are nothing of the sort. They have multiple websites that proclaim expertise in all areas.

We should also note that the regulator found faults and misinformation with every annuity website it checked in the review. Not what you would expect from so called specialists

As discussed before, if I was looking to buy an annuity, I'd shop around for quotes and get the best quote I could, then challenge a few IFAs to get me a better rate net of their fees. If IFAs are confident of getting a better rate than DIY then there should be no reason for them not to accept the challenge.

I think the key message from the MAS, FCA and others is to shop around, going to a single provider, broker or IFA is not likely to get you the best deal.

aayush

Am am new to all the above and just wanted advise I think I have 5 plans the are all Pension plans which I have frozen due one or other and wish to know if what is been discussed will affect them as have not moved from the company for years but have seem my original company taken over by the big boys

DiggerUK

The rip off, called private pensions, just keeps getting highlighted every five minutes.
Here is some food for thought, that should make anyone give these junk investments a wide birth.
http://www.telegraph.co.uk/finance/personalfinance/pensions/10638324/You-still-need-to-watch-out-for-annuity-rip-offs.html

The sweet talk about 'free money' should have warned everybody to steer clear of these toxic retirement plans. Sadly there were plenty born every minute, and enough sharks out there to take advantage of them.
..._

gadgetmind

DiggerUK wrote: »

The rip off, called private pensions, just keeps getting highlighted every five minutes.

So, instead of saving without tax, with generous employer contributions, and even a boost of 10%+ to my contribution as I pay via salary sacrifice, I should turn down all of this? What would I do instead? Invest the less than 25% of this money I'd get after tax etc. into something like gold?

Come on, get a grip. Yes, private pensions still have a way to go before they are anything close to perfect, but they trounce all other alternatives for those without generous Defined Benefit pensions.

Oh, and the article you linked to is a rather sensationalist piece about those to stupid too shop around when making perhaps one of the largest purchases of their lives. Would you buy a house without a survey and without checking the prices of similar properties in the area?

bmm78

DiggerUK wrote: »

The rip off, called private pensions, just keeps getting highlighted every five minutes.
Here is some food for thought, that should make anyone give these junk investments a wide birth.
http://www.telegraph.co.uk/finance/personalfinance/pensions/10638324/You-still-need-to-watch-out-for-annuity-rip-offs.html

The sweet talk about 'free money' should have warned everybody to steer clear of these toxic retirement plans. Sadly there were plenty born every minute, and enough sharks out there to take advantage of them.
..._

It's sad that people swallow hook, line and sinker what the media tell them. Trust me, one or two journalists in particular have a very clear agenda that is driven by anything but reporting and informing.

The articles and headlines were in place well before the FCA report came out. From the looks of the recent articles, very few if any have actually read the FCA report in full.

The biggest finding of the FCA review was that 91% of people are aware of their right to shop around, which is likely to provide a better income in the majority of circumstances. Despite this, the majority of people either do not shop around, or spend so little time and effort doing so that they needn't have bothered.

Cavendish

bmm78 wrote: »

Yes, but essentially are irrelevant as they only work from a limited panel that doesn't include the top enhanced providers.

Official Response from Cavendish Online.


We provide both Standard and Enhanced annuities from 4 providers at present. Cavendish Online will be adding a number of providers to the panel within the coming weeks and months.