Retirement Systems Blog
19 August 2019
From 1st November 2019, new legislation will require all annuity quote requests to include lifestyle and medical information. This legislation, known as PS19/1, has been introduced to ensure that customers are given guaranteed retirement income quotes that reflect their medical history and lifestyle in order for them to make an informed decision about their retirement options.
It is important that retirees are fully informed about their options, however, this change may require advisers and others in the industry to change their processes. On AMS Retirement we still see the majority of quote requests being produced with no height and weight details and no information about the client’s smoking and alcohol consumption – these factors can have a significant impact on the annual income and could be the deciding factor on whether the client choose an annuity or drawdown.
So, what does this mean for advisers? Since pension freedoms, annuities have been the benchmark from which all other retirement options are measured as they offer a guaranteed income – for this reason, most advisers will use annuities to demonstrate to their client what sort of income they could receive in retirement; even if the annuity isn’t an advised option. To provide this benchmark, in the past, many advisers have used only the most basic of personal details. However, from November, a data capture of lifestyle and medical history needs to be collected.
This will not cause much concern to many advisers as the fact find process should include some medical details, however, it may mean that your processes will need to change to ensure the fact find is carried out prior to annuity quotes being requested. It will also mean that ‘ready reckoners’ will need to be assessed to see if they comply with the new rules.
The legislation does allow for clients who do not wish to share their medical information; however, this would require an opt-out declaration by the client.
AMS Retirement will be releasing some changes to enforce these new rules. It will no longer be possible to obtain an annuity quote without entering some basic lifestyle and medical information (unless the client opts out). These changes will not affect the general quote request flow of the system but will ensure that all your quotes are PS19/1 compliant.
We will soon be launching additional tools to help with the collection of the client’s lifestyle and medical information (as well as other fact find data). Watch this space!