Pension providers will offer all customers impartial advice about buying annuities, as part of reforms set to be introduced by the Association of British Insurers (ABI).
The ABI will also ensure that its members provide customers with quotes from a range of different annuity providers.
These measures build on changes introduced as part of the ABI’s Retirement Choices Code and should help millions of savers to boost their retirement incomes.
They are expected to be introduced by summer 2015.
Go further: Which? Annuity Advisors – discuss your retirement options with our experts
Better advice for pensioners
The ABI is presenting plans to the Financial Conduct Authority (FCA) on behalf of the pensions industry.
It is looking to ensure that all pension providers give customers a comparison of annuity quotes early in the retirement process, and make them aware of alternatives to annuities.
It also aims to ensure providers ask customers for information about their health and lifestyle, which can be used to shop around for an enhanced rate.
Small pension pot rules
The ABI is still campaigning for the rules around small pension pots to be relaxed, so more pensioners can withdraw their savings as cash.
Currently, only pots containing £2,000 or less can be accessed as cash. The ABI wants this figure to be increased to £10,000.
Go further: Annuities explained – our guide explores everything you need to know about buying an annuity
Which? backs simplified annuities
Which? executive director Richard Lloyd welcomed action being taken to simplify the process of buying an annuity.
“Better information and impartial advice about annuities will help consumers to understand their options. We also want to see providers proactively publishing their rates to encourage people to shop around and get the best deal for them,” he said.