Sales of enhanced annuities are accelerating steeply, but they are still almost exclusively bought by those getting financial advice, due in part to the failure of the life companies’ code of practice to change anything.
While advisers would now need to justify why they did not recommend an enhanced annuity, it is a bad state of affairs for the non-advised.
Overall, the enhanced market has exploded.
Last year, sales reached more than £4.5billion: 31 per cent of all annuities sold, according to the Association of British Insurers (ABI).
But despite the fact that up to seven out of ten retirees could qualify, enhanced annuities are still the reserve of those who get advice.
Although there is a booming non-advised annuity purchase channel, only five per cent of the value of annuities sold on non-advised terms was enhanced last year.
This has increased to 18 per cent for the second quarter of 2013, but it is largely due to better interrogation of consumers, both on the telephone and online.
From April to July this year, 52 per cent of people bought an annuity with the holding provider, but only a pitifully low six per cent of those bought an enhanced annuity.
The hope was that the ABI code would encourage shopping around by getting providers to put the message clearly upfront.
But the initial signs show there has not been any sharp increase in those buying from another provider.
The annuity market is changing fast and writing annuities on individual terms is becoming the norm.
We must make sure people do not miss out on higher incomes due to lack of help.