Secondary annuity market was never a good idea

Moira O'Neill's picture

Plenty of people in retirement will be surprised and disappointed by the government’s decision to scrap its plans for a secondary annuities market.  Under the plans existing annuity holders – who may have been frustrated by the rate of income they received – would have been able to exit their contracts and regain control of some of their savings. 

But the secondary annuities market was always going to be stacked in favour of the buyer and posed unacceptable risks to savers, who could have seen the value of their pot ravaged by charges. With big providers like Hargreaves Lansdown saying they wouldn’t be participating and concerns mounting that people using a secondary market would be targets for fraudsters, it’s hardly a surprise that this U-turn has happened.

But like many pensions communications in recent years, the government hasn’t handled this well at all. Former pensions minister Ros Altmann, speaking to the BBC, said: "It will be disappointing to tens of thousands of people who bought an annuity they didn't want, and didn't need."

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