03 May 2002

Ruth Kelly speech to ABI biennial dinner

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Ruth Kelly, Financial Secretary to the Treasury, stresses the importance of the insurance industry in the British economy as one of the UK’s biggest sources of investment. She argues that 'It is in all of our interests to see an effectively functioning insurance industry, enabling individuals to save sufficiently for their old age, allocating investment efficiently, and providing a structural solution to the problem of risk.' Kelly also comments on the many recent reviews:

'Annuities are going to play an ever more important role in delivering income in retirement. Yet at the moment many people do not get as good a deal as they might when they convert their pension pot. They don’t shop around, or they buy the wrong type of annuity – yet they are making an absolutely critical choice and one that will affect the rest of their lives. The minority who want more flexibility in the use of large funds has so far dominated the debate. Our consultation on annuities shifts the focus to the real issues: how to make the market work better for the increasing number of people who will retire with more modest pensions.'

'The aim of Ron Sandler’s review is to identify the competitive forces that drive the long-term retail investment industry – including personal pensions - and examine the incentives created by the structure of the market.
The intention is to ensure that the structure of the UK market, with its products and government and infrastructure, leads to efficient investment decision-making and to optimal outcomes for consumer interests more broadly.'

'Alan Pickering was commissioned to carry out a comprehensive review of the rules and regulations governing private pensions. The aim is to make sure as much money as possible goes into the pension pot and not on red tape, as well as making it easier for employers to offer good pensions to their workforce.'

Full text of speech

© HM Treasury