Call for Secondary Annuities Market Cancelled

Commenting on Government's announcement yesterday that it will not pursue plans for a secondary annuities market Steven McEwan, insurance partner in Hogan Lovells Financial Institutions Sector, said:

"For the insurance industry, this will come as both a disappointment and a relief.  A disappointment because the ability to buy back annuities would have provided insurers with a new method of reducing their liabilities and capital requirements.  A relief because it would have required insurers to balance along a new tightrope of consumer protections and to develop new procedures, even if they were seeking to minimise their participation.

"This development leaves the dichotomy between those who retired before pension freedoms were introduced in 2015, who were required to buy an annuity, and those who retired after that and who were not required to do so.  It will be interesting to see if any alternative proposals will be offered to the former group, some of whom may feel unfairly treated."

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