RegulationJul 29 2014

Post-Budget annuities and cash Isa complaints could increase

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Complaints about annuities and cash Isas could be on the up following the dramatic reforms announced in the Budget earlier this year, data from the Financial Ombudsman Service has shown.

Figures published by the organisation showed a mild increase in complaints about annuities, with a spokesperson predicting a greater increase later on.

There were 189 complaints about annuities in Q1 2014, compared with 120 a year previously.

Martyn James, spokesman for Fos, said: “It’s likely that the government’s recent announcements on annuities in the Budget are having an impact on the cases that we will see. Undoubtedly it could result in an increase in complaints to the ombudsman in future.”

He said there had yet to be a major fallout from the changes to rules around cash Isas, but this could come later.

He said: “With the changes to Isas, complaints are going to be a bit later, with the new allowance starting in July, but we will find that out.”

The figures, which come from the July edition of the Ombudsman News, also showed a slight increase in mortgage complaints with 3007 in Q1 2014 compared to 2941 a year before.

Mr James added: “The mortgage market review could have had an effect but it’s a bit too early to see any real trends.”

James Garman, a chartered financial planner at Nottingham-based Retirement Specialist, said: “I think the biggest concern for the industry is that the people running the PPI claims outfits latched onto the fact that there might be a healthy market in the area of annuities.”