Aviva to Help Those with Small Pension Pots
Aviva is set to route customers with small pension pots to an annuity referral service to find the best deal from a panel of rival providers. Customers with pots worth less than Ã‚Â£30,000 will be referred to the service.
Customers are lead through their various annuity options by The Annuity Team and offered rates from a panel which includes Aviva, Aegon, Prudential, Canada Life, Legal & General and Partnership Assurance.
Aviva has already tested the model via a pilot with new retail customers. According to The Annuity Team a quarter of all customers referred to date have received an improved rate. The service is now to be extended to its maturing pension customers. Aviva says that it checks customers do not have an existing financial adviser before referral. Aviva does receive a cut of the commission The Annuity Team receives from the chosen provider but neither has disclose the amounts concerned.
Aviva annuity business director Clive Bolton says: "As an industry we have neglected people with average-sized pots. Seventy per cent of pension funds are under Ã‚Â£35,000 so we think this is close to the heart of the reputation of the industry. We need to get this right."
The Annuity Team chief executive John Mamelok says: "Smaller pots might not be commercially viable but we have a low cost base so it is mutually beneficial for firms to refer cases to us. The service enables customers to select the most suitable option at a better rate."
Annuity Exchange director Stuart Bayliss says: "It is good news. It is Aviva beginning to do what they said they would do with car insurance, where if you get a better quote with someone else they will do the business with them. This is a way of enabling that to happen with smaller annuity cases."