Chancellor George Osborne announced in Wednesday’s Summer Budget that implementation of a new secondary annuities market should be delayed until 2017 to ensure there was an in-depth package in place to support consumers in making their decision.
However, the government still wants all existing policy holders to have the freedom to sell their annuity income and said it will set out its plans for the secondary market in the autumn.
“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,” said Steven Cameron, regulatory strategy director at Aegon said.
“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,” Cameron said.
Designing an effective consumer protection system for those who want to access the new market is believed to be a major factor behind the government’s decision to delay implementation.
Aegon’s Cameron said that for the market to take off the Government would also need to play a role in facilitating certain central services.
For example when someone with an annuity sells their policy to another party there needs to be system in place to track when the original policy holder dies and thus the payments stop.
“We see this as best delivered through a Government agency.”
Meanwhile the chancellor also confirmed in his latest budget that government will conduct consultation with the industry during the summer months on options aimed at making the process for transferring pensions from one scheme to another quicker and smoother, including in relation to any excessive early exit penalties.
