The process for converting pensions into annuities could be overhauled if providers giving bad deals do not up their game says pensions minister Angela Eagle.
Speaking to Corporate Adviser, Eagle, minister for pensions and the ageing society said insurers who provided bad deals for uninformed consumers could force the Government to change the current structure.
Eagle is also pressuring providers to speed up the time taken for pension money to be released when consumers access the open market option, and wants an increase in electronic capability for transactions involving maturing pension funds.
Eagle says: “Those that are providing bad deals for annuities for existing members at the moment need to be aware that that sort of structure can’t continue. I would want every individual to know that they should shop around. If there was ongoing evidence that people aren’t doing that and they are getting worse results as a consequence then I would want to look to see whether we could change the structure to ensure that the default mechanism was a better deal.”
“We are looking at the evidence, we are seeing whether what we are doing with open market operations is going to have an effect and if it doesn’t have an effect then the next approach is more obvious, isn’t it?”