The intention for a secondary annuity market, where existing annuity policies could be assigned in return for a lump sum paid either to the annuitant or into an alternative retirement income product, was first mooted in early 2015 by the then Pensions Minister, Steve Webb.
The secondary market has continued to worry many within the industry and government, with its establishment, originally due for April 2016, being pushed back to April 2017 and many insurance companies openly not wanting to take part.
The announcement, which can be seen in full here, is therefore not a huge surprise, although it’s timing, given the relatively short time to the intended creation of the market, is.
The timing of the announcement remains interesting, with the first Budget speech of new Chancellor of the Exchequer, Philip Hammond due on Wednesday 23 November. Presumably he was keen not to highlight the U-turn at that prominent time, when the whole country would be watching!
The appointment of the new Pensions Minister, Richard Harrington, may also have some bearing on the timing of the announcement, he had highlighted his concern at the Pensions & Lifetime Savings Association’s annual conference that a secondary annuity market would have led to “unscrupulous operators taking advantage of consumers”.
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