Pensions - Articles - Malcolm McLean comments on the FCA’s annuity market probe

 Malcolm McLean, consultant, Barnett Waddingham, comments on the Financial Conduct Authority's (FCA) decision to push ahead with its annuity market probe.

 “The announcement that the FCA is to push ahead with its annuity market probe does not come as any great surprise.

 “The wide variation in annuity rates on offer from different providers at different times is one of the factors that serves to confuse consumers and often leads to the wrong decisions about the type of annuity they need, when to take one and the how and when of shopping around.

 “And this is an enduring problem. The ABI Code is clearly a step forward in many respects but greater transparency alone may not be enough to overcome the doubts that the FCA appears to have as to whether self-regulation will be effective enough on its own.

 “It is quite scandalous that so many people fail for whatever reason to get the best deal available from their annuity after years of saving and building up a pension pot. As things stand at the moment, purchasing an annuity is a hit and miss affair. We need a better system – one which is easier to understand and operate, and which commands the confidence of all concerned. I am sure the FCA realises this and hope it will come up with some better answers on the completion of its review.”