Retirement Line

A Message from Lord Pickles and Lord Blunkett, followed by Retirement Line's best practice article

The ability to listen and learn from one another has always been vital in parliament, in business and in most aspects of daily life. But at this particular moment in time, as national and global events continue to reiterate, it is uncommonly crucial that we forge new channels of communication and reinforce existing ones. The following article from Retirement Line is an attempt to do just that. We would welcome your thoughts on this or any other Parliamentary Review article.

Blunkett signature Rt Hon The Lord David Blunkett
Pickles signature Rt Hon The Lord Eric Pickles

Highlighting best practice
Owner and CEO DavidSlater
The anti-annuity and highly disruptive effect of pension freedoms
in the 2014 budget could have been the end for companies
specialising in annuities alone. But Retirement Line weathered
the storm and has since grown to become the UK’s largest annuity
broker. CEO David Slater looks at the impact of pension freedoms
on consumers’ choices at retirement and points the way towards a
future where everyone is better informed about their options.
The pension freedoms challenge
When I acquired Retirement Line in 2012, I could see its vast potential. Ninety per cent of
retirees were forced to use their pension pots to buy an annuity, and thousands benefited
from our pioneering, specialist online and telephone-based annuity broking service.
Just two years later, however, George Osborne in his 2014 budget stunned the
pensions sector when introducing the pension freedoms and declaring that, from April
2015, “No one will have to buy an annuity.”
The freedoms were not available for another 12 months and this naturally had an immediate
impact on our business, with annuity enquiries halving almost overnight. The days of
the annuity appeared numbered. Indeed, some commentators today still seem to be
giving an almost blanket endorsement for drawdown (where pension pots typically
remain invested), rejecting annuities altogether. The reality, however, is more complex.
Drawdown versus annuities
Since the freedoms, twice as many retirees have chosen drawdown over an annuity,
with many buying drawdown by default from their incumbent pension provider.
The FCA expressed numerous concerns about drawdown in its Retirement Outcomes
Review of June 2018, including:
»A trend towards taking drawdown without advice
»Low shopping around, leading to higher charges and weaker competition
»Ninety-four per cent of non-advised drawdown consumers taking drawdown from
their own provider
»Twenty-eight per cent of drawdown consumers unaware of where their money was
invested, and 34 per cent only having a broad idea
»Overall, 33 per cent of non-advised drawdown consumers are wholly in cash
»Up to 44 different opaque charges of between 0.4 per cent and 1.6 per cent
»Possibility of retirees running out of income due to excessive early withdrawals
Drawdown has its attractions, especially to those willing to accept investment risk, but it is
not without problems, and it’s certainly not for everyone. The case for annuities remains, and
the public could benefit from a greater awareness of the opportunities in the following areas:
1. A reliable route to guaranteed income
Annuities deliver a guaranteed retirement income, which is especially attractive to
conservative-minded savers seeking certainty and peace of mind. Drawdown is at odds
»Owner and CEO: DavidSlater
»Founded in 2009
»Based in Peterborough
»Services: The UK’s largest
annuity intermediary
»No. of employees: Over 50
»Authorised and regulated by
the FCA (reference number:
»2,000 consumers use its
service every month
»Information and quotation
service offered free of charge
to enquirers, irrespective
of how much time is spent
assisting them
»Appointedby Wesleyan as
exclusive partner to arrange
annuities for their customers
Retirement Line
with wanting to leave behind the risk,
uncertainty and hassle associated with
managing investments.
This was confirmed in a 2018 survey
conducted by wealth managers Tilney.
When they asked savers if they would use
their pension fund to buy an annuity at
retirement, just one in ten said yes, but
when the same people were asked if they
wanted a guaranteed or variable income
in retirement – even if the variable option
could be higher – 79 per cent said they’d
want the guarantee (that is, an annuity).
This survey demonstrates that although the
word “annuity” may have been tarnished
in the era of pension freedoms, many
people still want what an annuity delivers.
2. Extra income through enhanced annuities
Every year, many thousands of people
retire with a standard annuity when they
could have sourced an enhanced one.
These pay higher rates to people with any
of 1,500 qualifying medical conditions or
lifestyle issues because providers assume
they won’t live as long as a normal healthy
person. Overlooking what might seem
to be an innocuous personal matter can
mean missing thousands of pounds of
extra income throughout their life. Even
factors such as living alone or in certain
postcodes can secure a higher income.
Enquirers of Retirement Line are made
fully aware of the availability of enhanced
annuities and are asked the right detailed
questions to ensure they receive the
highest enhanced rates. During 2018,
we received over 2,000 annuity enquiries
every month and of those interested in a
lifetime annuity, over 80% qualified for
an enhanced annuity due to our Annuity
Specialists’ regular underwriting training
and experience, whereas the national
average is estimated to be 60 per cent.
3. Flexibility through a choice of annuity
For many people, standard lifetime
annuities are often the default choice.
However, other options may better
meet an individual’s personal needs. For
example, a fixed-term annuity allows
people to take their tax-free cash lump
sum and/or income for a set term of years
while keeping their future options open.
Annuity brokers such as ourselves play a vital
role by explaining to clients the different
types of annuity available, and shopping
around for them by obtaining quotes from
the UK’s leading providers. Additionally, due
to the volume of annuities we arrange, our
clients benefit from preferential rates to help
them secure the best retirement income.
Investing in technology and
Unlike most of our peers, we have an in-
house team of expert developers and IT
specialists. This has enabled us to develop
online tools such as quote calculators and
our own customised portal that enables
our systems to talk to those belonging to
all the UK providers. Through this portal
we can produce instant guaranteed
annuity quotes, including the majority of
our enhanced quotes.
Technology alone isn’t enough, though.
Artificial intelligence and robo-advisers
undoubtedly have their place, but emotions
can run high when people are making
potentially life-changing decisions about
their future. Human input and guidance
are of great value at times like this.
Many retirees are confused about their
options. Deciding how to invest their
pension fund, especially when it is worth a
substantial sum of money, can be a stressful
experience. Our service is designed to
overcome this by offering patience, care and
empathy from knowledgeable and friendly
staff. Contributing to this is our ethos of
ensuring all our staff enjoy working for our
family business, with our motto being “the
best of old-fashioned service with modern
technology”. Thoughtful measures, such as
avoiding soulless call centre environments,
are apparent in the quality and humanity
with which we treat our clients.
Consumers value
having instant access
to quotes from
annuity providers
measures, such
as avoiding
soulless call
are apparent in
the quality and
humanity with
which we treat
our customers
In itsRetirement Outcomes Review of June 2018, the FCA estimatedthat 60,000
to 80,000 retirees each year still prefer the security of annuities. I therefore
believe that consumers would have been better served had George Osborne
stated “No one will have to buy apoorannuity”.
The FCA has proposed a remedy package designed to “protect consumers from
poor outcomes, increase engagement with pension decisions and promote
competition”. We welcome these ambitions, which reflect our desire as annuity
specialists to help people become better informed about their options for
achieving a guaranteed retirement income and peace of mind.

This article was sponsored by Retirement Line. The Parliamentary Review is wholly funded by the representatives who write for it. The publication in which this article originally appeared contained the following foreword from The Rt Hon Theresa May MP.

The Rt Hon Theresa May MP's Foreword For The Parliamentary Review

By The Rt Hon Theresa May MP

This foreword from the then Prime Minister appeared in the 2018/19 Parliamentary Review.

British politics provides ample material for analysis in the pages of The Parliamentary Review. For Her Majesty’s Government, our task in the year ahead is clear: to achieve the best Brexit deal for Britain and to carry on our work to build a more prosperous and united country – one that truly works for everyone. 

The right Brexit deal will not be sufficient on its own to secure a more prosperous future for Britain. We also need to ensure that our economy is ready for what tomorrow will bring. Our Modern Industrial Strategy is our plan to do that. It means Government stepping up to secure the foundations of our productivity: providing an education system that delivers the skills our economy needs, improving school standards and transforming technical education; delivering infrastructure for growth; ensuring people have the homes they need in the places they want to live. It is all about taking action for the long-term that will pay dividends in the future.

But it also goes beyond that. Government, the private sector and academia working together as strategic partners achieve far more than we could separately. That is why we have set an ambitious goal of lifting UK public and private research and development investment to 2.4 per cent of GDP by 2027. It is why we are developing four Grand Challenges, the big drivers of social and economic change in the world today: harnessing artificial intelligence and the data revolution; leading in changes to the future of mobility; meeting the challenges of our ageing society; and driving ahead the revolution in clean growth. By focusing our efforts on making the most of these areas of enormous potential, we can develop new exports, grow new industries and create more good jobs in every part of our country.

Years of hard work and sacrifice from the British people have got our deficit down by over three quarters. We are building on this success by taking a balanced approach to public spending. We are continuing to deal with our debts, so that our economy can remain strong and we can protect people’s jobs, and at the same time we are investing in vital public services, like our NHS. We have set out plans to increase NHS funding annually by an average by 3.4 percent in real terms: that is £394 million a week more. In return, the NHS will produce a ten-year plan, led by doctors and nurses, to eliminate waste and improve patient care.

I believe that Britain can look to the future with confidence. We are leaving the EU and setting a new course for prosperity as a global trading nation. We have a Modern Industrial Strategy that is strengthening the foundations of our economy and helping us to seize the opportunities of the future. We are investing in the public services we all rely on and helping them to grow and improve. Building on our country’s great strengths – our world-class universities and researchers, our excellent services sector, our cutting edge manufacturers, our vibrant creative industries, our dedicated public servants – we can look towards a new decade that is ripe with possibility. The government I lead is doing all it can to make that brighter future a reality for everyone in our country. 

British politics provides ample material for analysis in the pages of The Parliamentary Review 
The Rt Hon Theresa May MP
Prime Minister