Government sticks to guns on secondary annuity market

Government sticks to guns on secondary annuity market

The government has no plans to reverse its decision to bin plans for a secondary annuity market, the City Minister has said.

In a written answer to Conservative MP Craig Mackinlay, who asked the if the government planned to extend to the annuity market the freedom people have to access their pensions, John Glen said there were "no plans to review the decision".

Mr Glen, who is also economic secretary to the Treasury, said that as plans for a secondary annuity market progressed, "it became increasingly clear that the conditions required for a competitive market to emerge, with multiple buyers and sellers of annuities, could not be balanced with sufficient consumer protections".

He added: "This could have led to consumers receiving poor value for their annuity income streams and suffering higher costs in the sales process.

"Consumer protection is a top priority for the government and it would not have been acceptable to allow a market to develop which could produce poor outcomes for consumers."

A secondary annuity market, first proposed in December 2015, and would have allowed people drawing annuities to sell their contracts, extending the pension freedoms announced in the Budget two years ago.

But many providers warned that widescale fraud could take place, especially if the secondary annuity market evolved into something much bigger than intended.

The Treasury said it would scrap the plans just months before implementation, saying the consumer protections it would have to implement would undermine the market's development.