UK insurer, Prudential, has been fined £23.8 million by the City watchdog for not telling thousands of customers they could get a better deal by shopping around for a pension annuity, the Financial Times reports.
Insurance companies are required to tell retiring customers looking to turn their pension pot into an income, or an annuity, that they could get a better deal from a competitor.
However, the Financial Conduct Authority (FCA) stated that between 2008 and 2017, Prudential failed to tell to some of its customers they could have got a higher annuity rate elsewhere.
An annuity is a retirement income product that can be bought with a customer’s pension pot, and which pays them a regular income in return.
The FCA said customers need accurate information when choosing an annuity, because it is a complex financial product and can affect the customer, and their dependants, for life.
As of September 2019, Prudential has offered approximately £110 million in redress to 17,240 customers.