Excessive Profits Rob Pensioners of Income

Insurers have been accused of taking excessive profits on annuities - robbing pensioners of retirement income according to City regulator

Emma Wall 10 December, 2013 | 4:08PM
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Pensioners are being robbed in retirement, according to a report by the Financial Services Consumer Panel (FSCP). The FSCP, which calls itself an independent voice for consumers of financial services in the UK, revealed that insurers were making up to 20 times more profit on an annuity than any other financial product or service they provide.

After a year long study into the annuity market, the Panel concluded that a lack of regulation in the annuity industry was negatively impacting the consumer, and the current commission based model had to change. 

"We are seeing a shift towards purchasing annuities via non-advice routes, which means reduced consumer protection if things go wrong," said FSCP chairman Sue Lewis.

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Emma Wall  is former Senior International Editor for Morningstar

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