8th July 2015
Retirees will not be able to sell on annuities they have already purchased on the secondary market until 2017 at the earliest.
Budget documents reveal no further detail on what form the market will take.
The document reads: “Secondary market for annuities – Following consultation, the government has decided to delay implementation of this measure until 2017, in order to ensure there is a robust package to support consumers in making their decision. It will set out further plans for introducing this measure in the autumn. (Finance Bill 2016)”
Steven Cameron, regulatory strategy director at Aegon, said: “We’re pleased that the Government is looking to delay implementation of the secondary annuity market until 2017 and that no decision will be rushed. It‘s important industry and Government work together to make this safe for consumers. It’s also important to highlight this won’t be the right option for most people.
“Future challenges include supporting customers assess what’s a fair deal and when advice should be a requirement. Selling your annuity is as complicated a decision as transferring from a final salary to defined contribution pension with risks including unexpected tax bills, running out of money, or losing ongoing payments to a spouse in the event of their death.”
He added: “To ensure customers know they are dealing with reputable organisations, we believe it’s vital that all those involved are regulated by the FCA.
”For the market to take off, we believe Government has a key role to play in facilitating certain central services. On assignment, annuity providers lose contact with the annuitant and will needs to be a reliable mechanism for being told when the annuitant dies so payments can stop. We see this as best delivered through a Government agency.”