The managing director of MorganAsh has said he could set up a bureau for buying and selling annuities in six months – but needs more certainty from the government.
Andrew Gething has said his Cheshire-based underwriter would act as an independent intermediary as part of a secondary annuity market.
He said: “If we have a secondary annuity market there is going to be a need to understand people’s health and underwrite those people so their annuities can be bought out.
“We believe that doing that once will be an efficient way for the market to operate. We have been talking to a lot of providers and a lot of people think that’s a good idea.
“We think we could run a secondary annuity market bureau.”
Mr Gething said his company already had in place “90 per cent” of the systems which such a bureau would need to operate.
He added: “I view it in several different processes. For the higher-value pots, doing it manually would be fine. But for the smaller pots you really want something slick and automated to keep the cost of the transaction down. Building the technology will probably take about six months, and the sooner we start the sooner we will get there. Clearly no one is willing to invest in anything until it becomes clearer.”
According to a Treasury consultation which ended last month, the government thinks it could have a secondary annuity market up and running in April.
The government has also said it will work with the FCA to put consumer protection in place – its consultation paper already stated there was a strong case for requiring annuity holders to take financial advice.
Industry view
Yvonne Braun, director of long-term savings strategy at the ABI, said: “Naturally there are considerable challenges in establishing a functioning market, and many unresolved complex legal, regulatory and prudential questions.
“We want to work with the government to help resolve these issues, but given the lessons learned from the freedom and choice reforms and the need for clarity in many areas, we urge the government not to rush these proposals through for 2016.
“Allowing more time will ensure an appropriate regulatory regime can be developed to give this new market a chance to succeed.”
