Wednesday, 19 October 2016 09:18

Ex-Pensions Minister attacks axing of 'lifesaver' for thousands

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The former Pensions Minister has attacked the Government's decision to abandon a “potential lifesaver” for thousands of people.

Plans for a secondary annuities market were officially scrapped late yesterday afternoon over fears about consumer protection.

The out of the blue announcement has been criticised today by Baroness Ros Altmann, who left her Ministerial role in the summer.

She branded the move a “major disappointment for thousands of people”.

She said: “Many will be stuck for the rest of their life with an annuity they never wanted: This was never likely to be a huge market, but for some individuals it would have been a potential lifesaver.

“Those who bought an annuity because they were forced to do so, but would not have purchased one unless the law required it, have been waiting desperately for an opportunity to sell it but that opportunity is now being taken away from them.”

Many have been “waiting anxiously for the opportunity to undo the annuity they were forced to buy and will feel let down”, she claimed.

See more reaction here.

She said: “Of course it is vital that consumer protection is put in place to help people understand the value for money they would be offered, but that was going to be offered by financial advisers and Pension Wise.

"The Government's most recently announced overhaul of financial guidance has made the Pension Wise route impossible because the whole guidance landscape is now up in the air. Pension Wise Guiders were waiting to be trained to give the guidance for people before the secondary annuity market started in April 2017, but the latest announcement of further rethinking of the Government's free help for customers has resulted in today's decision."

She believes it would have been a “potentially valuable service for people who will now be stuck for life with an annuity that they did not want to buy and may not be the most suitable product for their retirement needs”.

The Economic Secretary to the Treasury, Simon Kirby, said: “It has become clear that we cannot guarantee consumers will get good value for money in a market that is likely to be small and limited.

“Pursuing this policy in these circumstances would put consumers at risk – this is something that I am not prepared to do.

“The government has always been clear that for the majority of people keeping their annuity incomes will be their best option, estimating that only 5% of people who currently hold an annuity would take advantage of this reform.”

Read 1087 times Last modified on Thursday, 20 October 2016 12:45

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