New code for sales of retirement income products
The Association of British Insurers (ABI) has launched a new code of conduct for sales of retirement income products.
The ABI's new code of conduct titled "Consumers in the Retirement Income Market" will help ensure that people are informed and equipped with the information they need to understand their options.
The ABI said that its members would adopt the new code of conduct by March 2013, or sooner if they wish.
"[This will] make customers more confident and more able to make decisions about their retirement income," said Otto Thoresen, director general of the ABI.
It will be mandatory for members of the ABI to follow the code.
In summary it says:
- Provide clear and consistent information, including details on how to shop around for an retirement income plan
- Highlight the details of enhanced retirement income plans - the higher pension income available to those with shorter life expectancy
- Signpost customers to external advice and support that is available
- Give a clear picture of how their products fit into the wider retirement income market.
Members of defined contribution pensions build up a pension pot based on the amount of money paid in and the investment growth on this money. At retirement, defined contribution plans don't automatically provide an income.
Many people are unaware that they should shop around for the best retirement income product to suit them and to get the best rate.
To read the report and more on the code, please follow this link to the ABI website: