Pensions  

Brexit unlikely to derail secondary annuity market: Tisa

Brexit unlikely to derail secondary annuity market: Tisa

Adrian Boulding, pensions strategy director at the Tax Incentivised Savings Association, said the regulation required to allow the secondary annuity market to be launched is unlikely to be jettisoned because of the Brexit.

Steven Cameron, pensions director of Aegon UK, urged the government to give an early indication of its plans to take forward initiatives such as the Lifetime Isa and the secondary annuity market.

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Mr Cameron said: “Unless we get more detail very soon, the April 2017 introduction looks very challenging.”

As part of the Summer Budget, chancellor George Osborne delayed the launch of a secondary annuity market by a year, meaning people will now not be able to sell their annuity for a lump sum until 2017.

In December 2015, the Treasury announced that its free guidance service Pension Wise would be extended to those participating in the secondary annuity market, which is due to be implemented in April 2017.

Earlier this year the government also tabled an amendment for mandatory advice for those with higher value annuities through the Bank of England and Financial Services Bill.

But speaking at a Tisa event today (30 June), Mr Boulding said: “I’ve got a feeling that with the secondary annuity market we are most of the way through, so if they are going around Whitehall saying ‘how can we save some time and free up some people?’, if we’ve done most of the work already on this then it wouldn’t make sense.

“It hasn’t got much more civil service time, I think it will get through but we’ll find out.”

Michelle Cracknell, chief executive at the Pensions Advisory Service, said it was likely to be the industry that would get the blame if the Brexit prompts the start of the secondary annuity market to be pushed back.

Speaking at the Tax Incentivised Savings Association’s briefing on the secondary annuity market today (30 June), Ms Cracknell said she had no idea what was going to be in and out of parliamentary agenda as a result of the UK’s decision to exit the European Union.

Ms Cracknell said: “I think there is a customer perception issue because they think they are going to get a good deal and they’ve got this pent up demand.

“They think they are going to get a better deal than they will get and then the bid is delayed even further and who’s fault is it going to be? The industry.”