Pensions  

Annuity market delay could be positive: MorganAsh

Annuity market delay could be positive: MorganAsh

A delay to the secondary annuity market could benefit consumers, the managing director of MorganAsh has warned.

Andrew Gething had previously said his Cheshire-based underwriting company would be interested in acting as a bureau for the trading of annuities.

Last week the government announced the annuity market would be postponed from 2016 to 2017 but will set out its plans in the autumn.

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Mr Gething said: “While it is frustrating to have the delay, it is probably a good thing.

“A lot of companies have not had resource to give sufficient attention to the secondary market as they were focusing on pension freedoms, new retirement products, and the second line of defence.

“The extra time also gives us time to build IT systems to automate a lot of the transaction, and hence keep the costs down, which is vital particularly for the smaller values.”

Mr Gething said his company already had in place 90 per cent of the systems which such a bureau would need to operate.

In its response to the Treasury and DWP’s joint consultation paper, Creating a Secondary Annuity Market, issued in March, John Perks, managing director of LV= retirement solutions, said: “We believe that individuals should have the right to sell their annuity to their existing annuity provider should the provider be willing to do so, and where the provider can demonstrate that a fair offer has been made.

“We do not believe that it is in the spirit of the reforms to restrict individuals’ freedom and choice as to how they take their retirement income.”

Adviser view

Colin Thompson, an adviser with Hertfordshire-based Provisio Chartered Financial Planners, said: “It is not necessarily a bad thing to put this off given what has been introduced already this year.”