The Government has previously said that it would consider how the pension flexibilities that have already been introduced could be extended to people locked into existing annuities. Minister’s consulted extensively with the industry and with consumer groups to explore whether the right conditions for a market in secondary annuities could develop properly.
Throughout the consultation, one of the highest priorities was to establish whether people could get a good deal through such a market. Regrettably two things have become clear through the Government’s investigation. First, without compromising on consumer protections there would be insufficient purchasers of these annuities to create a competitive market in which British pensioners could get a good deal. Secondly, pensioners trying to sell their annuities would also be likely to incur high costs in doing so.
This Government have made it very clear that we want this to be a country that works for everyone, and that includes making sure that everyone gets a high level of consumer protection. It has become clear, through our extensive research, that a secondary market would not be able to offer this. Rather than being to the benefit of British pensioners, it would instead be likely to be to their detriment. It is for that reason that the Government will not be taking this policy further.
By Patrick McLoughlin on November 17, 2016