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Government decides not to proceed with secondary annuity market

Government decides not to proceed with secondary annuity market

The government has announced it is cancelling plans to allow people to sell their pension incomes for cash.

It was proposed that those who have already taken out annuities would be able to cash them in for a lump sum through a secondary annuity market.

Simon Kirby, Economic Secretary to the Treasury, said: "Allowing consumers to sell on their annuity income was always dependent on balancing the creation of an effective market with making sure consumers are properly protected.

"It has become clear that we cannot guarantee consumers will get good value for money in a market that is likely to be small and limited. Pursuing this policy in these circumstances would put consumers at risk - this is something that I am not prepared to do."

Richard Balfour, Head of Product Development & Performance at Wesleyan, said: "We believe it is the right decision by the government to halt plans for a secondary annuity market.

"We, along with other financial services providers, have supported the pension freedom reforms, but agree there are concerns about a secondary annuity market. The industry has
highlighted the challenges involved and worked with the government to try to solve them, but we believe there would still be considerable risks for customers."

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