Government urged not to rush through annuity changes
29 Jun 2015
The Government is being urged not to rush through plans to allow an extra five million pensioners to sell their annuities for cash, amid fears that people could be put at risk.
The warning came from the Association of British Insurers (ABI) in response to the Government’s consultation on the reforms.
In his March Budget the Chancellor announced his intention to extend the recent pension reforms to enable people who have already purchased an annuity with their pension pot to sell it back.
While it supports the proposals in principle, the ABI said it has reservations over the proposed April 2016 start date, given the ‘considerable challenges in establishing a functioning market, and many unresolved complex legal, regulatory and prudential questions.’
The trade body also expressed concerns over how the rights of dependents and beneficiaries would be protected and how people would be safeguarded against fraud and scams.
‘We want to work with government to help resolve these issues, but given the lessons learned from the [recent] reforms and the need for clarity in many areas, we urge the government not to rush these proposals through for 2016,’ commented Yvonne Braun from the ABI.
‘Allowing more time will ensure an appropriate regulatory regime can be developed to give this new market a chance to succeed.’
A spokesman for the Treasury said: ‘We are removing restrictions on selling annuity income so that the five million people who have already bought them have the same freedom as everyone else’.