Response to financial conduct authority thematic review

11th December 2014

Jonathan Watts-Lay, Director, WEALTH at work, comments on the latest FCA findings of its work into annuities sales practices and retirement income market.

Jonathan Watts-Lay comments; “I welcome the FCA’s Thematic Review on annuities sales practices. It highlights the enormous issue of consumers and indeed employees not shopping around when purchasing annuities and potentially missing out on higher income through the open market or perhaps qualifying for a better paying enhanced annuity. Many employers have annuity broking arrangements in place, which are often subsidised but are often based on restricted panels which is far from ideal”.

He adds, “Planning for retirement is not just about annuities – individuals need to consider all of their options at retirement whether that is taking some form of drawdown, buying an annuity or a combination of options. In fact, some may want to make a series of decisions over time, rather than a single choice at retirement. We believe the starting point should be providing financial education in the workplace, supported by individual guidance and regulated advice when required. Trustees need to get this onto their agenda. The Pensions Regulator has previously emphasised the need for a ‘robust retirement process’ and with the new rules around pension freedom and choices all Trustees should ensure their retirement processes are now indeed robust or risk members making poor decisions”.

If you would like a copy of the FCA findings please click here.