Annuity sales will bolster asset managers – Moody’s

Annuity sales will bolster asset managers – Moody’s

The change in rules allowing people to sell their annuity could see an immediate inflow to asset managers, credit ratings agency Moody’s Investor Services has said.

In a five-page report, UK Pension Rule Changes Boost Opportunities for Asset Managers, Moody’s said up to five million people could benefit from the change immediately it comes into effect.

This could also see more people looking to put their money into investment funds, the report said.

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However, it added that the benefit to asset managers would depend greatly on “the shape of the secondary market for annuities and the prices offered for them”.

Adviser view

Frank Cochran, managing director of West Midlands-based FSC Investment Services, said: “I think the secondary annuity market could go the way of the endowment sale market by the looks of it.

“Some people of course will still want the security annuities provide in terms of certainty of income. But unless we are very careful, it could end up being a scandal some time in the future.”