New rules on annuity sales

PEOPLE approaching retirement will receive better advice to help them purchase the best possible annuity, according to a new code of conduct published yesterday by the Association of British Insurers.

The code requires insurers to spell out options for buying an annuity – which converts pension savings into retirement income – up to two years before an individual leaves their job.

It will encourage customers to shop around for the best deal, as well as providing advice on combining small pension pots and combating the effect of inflation.

In January the Financial Services Authority said it would investigate whether customers who bought an annuity directly from a pension provider were getting a bad deal.