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FCA proposes measures to increase awareness of enhanced annuities

FCA proposes measures to increase awareness of enhanced annuities

The FCA has announced proposals with the aim of ensuring that consumers are better aware of the potential for an enhanced annuity. Retirement Line welcomes the move, but believes that consumers could still be in the dark about their full income potential.

The FCA’s concern expressed in its Retirement Outcomes Review¹ is that, at decumulation, individuals are provided with a quote based only on information that the pension scheme has about them. Although most retirees may be eligible for an enhanced annuity, the pension provider is usually unaware of a customer’s health and therefore cannot provide an accurate quote.

Looking at some of the FCA’s comments makes interesting reading:

“At the point that a consumer is considering purchasing an annuity we want to ensure that consumers are aware of their eligibility for an enhanced annuity. Following feedback to the Interim Report, we propose to require providers to ask consumers questions on health and lifestyle factors to assess their eligibility for an enhanced annuity. Providers will then present their quote alongside the highest quote available on the open market for an enhanced annuity, where eligible.”

Are pension providers ready to produce robust enhanced annuity quotes?

Although Retirement Line welcomes anything that would increase consumer awareness of enhanced annuities, we are concerned about a possible lack of consistency in the method used to calculate an enhanced quote.

We believe that Retirement Line is especially successful in securing the best enhanced annuity rates due to our large team of experienced Annuity Specialists asking the right searching questions about our clients’ health and lifestyle. This is made possible due to our ongoing investment in underwriting training for our Annuity Specialists.

We know from long experience of comparing our enhanced rates with providers and IFAs that they don’t necessarily have our capability to generate ‘the highest quote available on the open market’ which concerns the FCA. The worst scenario is that a retiree could be sent what purports to be the best enhanced quote, where in fact it could be anything but.

Without a full review of all of one’s personal circumstances, including their medical and lifestyle conditions, they could miss out on the best enhanced annuity rate and income. As part of the FCA’s consultation process, we will raise our concern that consistency is needed in the method by which enhanced quotes are calculated by pension firms.

Enabling your clients to access the best annuity rate

When it comes to helping your clients make the right annuity choice, Retirement Line makes life easy for you and your annuity clients. We help nearly 2,000 annuity enquirers every month and are very often able to secure a better retirement income for them. For example, of those interested in a lifetime annuity, over 80% qualify for an enhanced annuity with higher income.  

Once the annuity purchase is complete, Retirement Line pays you an attractive share of commission as an Introducer Fee: please see our Annuity Introducer Fees page, call us on 0800 1444 777 or email

¹ FCA Consultation Paper CP18/17, June 2018.

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