* Income drawdown is a mature option now – not just a means to annuity deferral but an option in its own right.
* There are alternatives, but each has issues – temporary annuities are often perceived as third-way type products with poor rates and are seen as complicated and expensive.
* Over the years the underwriting process for enhanced or impaired lives has increased dramatically. Surely everyone who buys an annuity should be told that certain circumstances could lead to a better annuity rate?
The final point to consider is the role of comparison websites and the question of advice or guidance.
The FCA looked at 13 websites with good and bad practice. For me the key is to clarify what execution-only websites are charging for an annuity, and the ongoing argument between advice and guidance.
So, another year another study? We will not do ourselves any favours if we do not take some short-term measures to address the problems that we have known about for at least 12 years.
Mike Morrison is head of platform technical of AJ Bell
Key Points
* The FCA’s thematic review into annuities harks back to papers published in the past about lack of choice with annuities
* The thematic review is designed to assess whether people will get a better solution by shopping around
* Annuity rates have fallen and are unlikely to rise by much again – is innovation needed?
