Grace rules Aegon out of annuity market

Grace rules Aegon out of annuity market

Adrian Grace has ruled Aegon UK out of taking part in the secondary annuity market.

The chief executive of Aegon UK said his company would not be taking up the opportunity of buying annuities.

Some pension providers, including L&G and LV=, have already said they would take part in the market under the right circumstances.

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Last month Aegon UK gave the announcement of a government consultation on the measure a cool reaction, but said it would look into it.

But Mr Grace now said: “It is not a market we would want to participate in. We have had a look at it and we do not see it as something we think is for us because we see our focus as being very much on providing customers with the right solutions up front.”

Last month, a consultation document published by the department for work and pensions and the Treasury said the government was open-minded about the type of company or body that could buy annuities but suggested that insurance providers, pension funds and institutional investors could be attracted to it.

Under the government’s proposals, the secondary annuity market would come into effect from April 2016.

Adviser view

Claire Walsh, a financial planner with Brighton-based Aspect 8, said: “I would be surprised if there are many companies in the market.

“It probably will not be a good idea for consumers, and the reasons people brought an annuity in the first place will probably still stand.”