The government has “no plans” to review its decision regarding the secondary annuity market, HM Treasury economic secretary John Glen has said.
Responding to a parliamentary question from Conservative MP Craig Mackinlay, who asked whether the Chancellor of the Exchequer plans to “extend to the annuity market the freedom that people have to access their pensions”, Glen rejected the need to review the already scrapped proposal.
The Treasury repeated its view that creating the conditions to allow a vibrant and competitive market to emerge, with multiple buyers and sellers of annuities, could not be balanced with sufficient consumer protections.
Glen explained that retaining the secondary annuity market may have resulted in consumers receiving poor value and high costs through 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 something which could produce poor outcomes for consumers.
“There are no plans to review the decision not to continue with proposals for a secondary market in annuities at this time", Glen confirmed.
In October 2016, the Treasury announced that it had cancelled its plans to create a secondary annuities market due to concerns over consumer protection.
It said that after an extensive programme of engagement with the industry, financial regulators and consumer groups, the government decided not to take forward plans to introduce a secondary annuities market because the consumer protections required could undermine the market’s development.
The secondary annuities market was due to launch in April 2017 and would have allowed individuals to sell their annuity income without the tax restrictions that currently apply.