The Financial Services Consumer Panel (FSCP) has urged for changes in how pension annuity schemes are sold, describing the industry as dysfunctional and criticising it for being full of hidden commissions. The FSCP stated that pensioners choosing to invest in annuity schemes with insurers that they already posses a pension plan with could be missing out on beneficial deals, instead being lure into options that carry hidden charges.
A lack of transparency has been named as the biggest issue, with the 400,000 who purchase annuities annually likely to be unaware of hidden charges and better offerings from other companies.
The FSCP are pushing for an investigation into the pricing of annuity schemes from insurance companies, particularly those offered to pensioners already saving with them. The focus of this investigation should be the hidden charges that are often found in pension annuity schemes.