The U.K. Financial Services Authority has begun an investigation into whether consumers buying annuities are getting a fair deal.
The FSA will conduct a pricing survey and review the availability of policies, it said in a statement today. The regulator may also probe whether companies selling annuities hinder consumer choice.
Annuities sold by life insurance companies guarantee fixed payments over a specified period of time. They are commonly used by retirees who can use their pensions to buy an annual income.
“An annuity purchase is an important one-off decision that has long term consequences for individuals if they get it wrong,” Nick Poyntz-Wright, the FSA’s head of life insurance, said in the statement. “We want to understand the level of the potential detriment for consumers if they do not shop around.”
To contact the reporter on this story: Kit Chellel in London at firstname.lastname@example.org
To contact the editor responsible for this story: Anthony Aarons at email@example.com