I’ve been feeling a bit like Aesop’s stork lately, the one caught by the farmer in the company of seed-stealing cranes.
“Pray save me, Farmer,” said the stork. “I am no crane; I’m a stork, a bird of excellent character.”
But the farmer just laughed. “Be that as it may,” he said. “I have taken you with these robbers, the cranes, and you must share their punishment.”
If you’ve been reading the papers, you’ll know what I’m talking about: the media attention about customers getting a poor deal from annuity providers, especially if you buy an annuity from the company your pension plan is with.
I’m not looking for sympathy. I know it can look from the outside that all annuity providers are alike – selling the same products the same ways – but the truth is we’re not. And a lot of us, including Aviva, offer customers a good deal. So, speaking as someone on the inside, it’s frustrating when we’re all tarred with the same brush.
Let’s set the record straight on annuity rates
Yes, annuity rates are low across the board at the moment. Low annuity rates are a reflection of a tough economic climate, which determines the level of return we can secure on the assets we buy with customers’ pension funds.
The good news is that once you buy an annuity, you get a guaranteed income for life no matter what happens. And at Aviva, we offer the same annuity rates to new and existing customers (who have pension plans with us).
More importantly, we tell customers, like you, to shop around for an annuity. For years, we’ve worked hard to highlight the importance of shopping around on the open market, and the difference it can make to your retirement income.
I’ve been personally involved with a lot of that work, and I know how important it is to Aviva. We do it because it’s the right thing to do. And, as one of the most competitive providers out there, we don’t have to worry about losing customers to our competitors. In fact, we currently have the biggest share of the open market, which means customers are choosing us over their pension provider (and other companies) when they’re ready to buy an annuity.
The truth will out
Soon, all annuity providers will have to publish their rates. I think that’s a real step forward for the industry. It’ll make it easier to choose the right annuity for you from the open market. And it’ll expose those companies who are giving customers a poor deal at retirement. About time too!
In the meantime, I’d encourage you to get advice and shop around before you buy an annuity or an alternative retirement product. Don’t believe everything you read in the papers, find out for yourself where you can get the right retirement income for your budget and needs.
That’s what I’d do.
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