Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • October 2016
10

Small secondary annuity market would put consumers at risk

Open-access content Thursday 20th October 2016 — updated 5.50pm, Wednesday 29th April 2020

Government decides that consumer protections for secondary annuities would undermine market development.

2


Although many firms have been willing to allow customers to sell their annuities, the number has been deemed insufficient to create a competitive market.

Following discussions with industry, financial regulators and consumer groups, the decision was made that creating conditions for a vibrant market could not be balanced with sufficient consumer protections.

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 too small and limited.

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

Former Chancellor George Osborne announced the plan to introduce a secondary annuities market in March last year.

It would have provided those with DC pensions the complete freedom to use them as they wish from the age of 55.

Aegon pensions director, Steven Cameron, said: "The secondary annuity market would have offered those with existing annuities freedoms but they also created many risks which could have led to individuals ending up worse off.

"While it seems odd to argue against 'freedoms', sometimes these come at huge personal risk and it's the government's job to set policies which work for the greater good."   

Cameron added that individuals who might have been initially attracted to this could have lost out once they discovered what was on offer, such as those with low life expectancy wanting to sell their annuity, who in reality, would have got a worse return the poorer their health.

"So while the secondary annuity market might have looked like a good idea, as soon as you looked at the detail, there were 101 questions around how it could be made to work well for consumers," he said.

"We are pleased that the government has listened to widespread concerns and done the right thing."

This article appeared in our October 2016 issue of The Actuary .
Click here to view this issue

You may also be interested in...

2

Labour appoints Cunningham as shadow pensions minister

Labour has named Alex Cunningham as shadow pensions minister.
Monday 17th October 2016
Open-access content
2

New plans proposed for more electric vehicle chargepoints

Plans to make electric vehicle chargepoints more widely available and convenient for motorists have been put forward by the government to be included in the Modern Transport Bill.
Tuesday 25th October 2016
Open-access content
2

Government support not needed for Heathrow expansion

Heathrow have confirmed to the government that expansion will be financed without their support, including the additional package of supporting measures.
Wednesday 26th October 2016
Open-access content
2

China suffers extreme floods but improved defences mean less damage

China has experienced its worst floods since the supposedly ‘one in 100 years’ flooding of 1998, but damage to crops has reduced, Aon Benfield has said.
Wednesday 12th October 2016
Open-access content
2

Uber drivers entitled to basic workers rights in 'ground-breaking' decision

The union for professional drivers, GMB, have won their case against Uber after a London employment tribunal determined today that their drivers are entitled to basic workers rights.
Friday 28th October 2016
Open-access content
2

Almost two-in five millennials choose to spend now rather than save or invest for the future

Younger people unconvinced of the need to save for their future, research from Investec has found.
Tuesday 11th October 2016
Open-access content

Latest from Position

TPR publishes coronavirus guidance

The Pensions Regulator (TPR) has published guidance to help UK pension trustees, employers and administrators deal with the financial and regulatory risks posed by coronavirus.
Monday 23rd March 2020
Open-access content
2

Expert advice

This edition of the magazine focuses on data science and its applications, which will be a recurring theme for the IFoA.
Friday 28th February 2020
Open-access content
2

Tesla sparks fears of insurance market overhaul

That is according to a new report from Moody's, which highlights how Tesla has already started offering premiums that are up to 30% cheaper than those of mainstream insurers.
Friday 14th February 2020
Open-access content

Latest from October 2016

New Northern Powerhouse partners announced

Dozens of leading businesses have signed up to the new government scheme today, taking the total number of Northern Powerhouse partners up to 31.
Monday 31st October 2016
Open-access content

Potential £90m saving for home insurance customers

The average person could save £66 by switching home insurance provider, collectively missing out on £90m worth of better deals according to research by comparethemarket.com.
Monday 31st October 2016
Open-access content

London Living Wage rises 3.7%

Mayor of London Sadiq Khan announced today that the new London Living Wage has increased from £9.40 to £9.75 an hour to reflect the higher cost of living.
Monday 31st October 2016
Open-access content

Latest from small_opening_image

2

COVID-19 forum for actuaries launched

A forum for actuaries has been launched to help the profession come together and learn how best to respond to the deadly coronavirus sweeping the world.
Wednesday 25th March 2020
Open-access content
2

Travel insurers expect record payouts this year

UK travel insurers expect to pay a record £275m to customers this year as coronavirus grounds flights across the world, the Association of British Insurers (ABI) has revealed.
Wednesday 25th March 2020
Open-access content
2

Grim economic forecasts made as countries lockdown

A sharp recession is imminent in the vast majority of developed and emerging economies as the deadly coronavirus forces businesses to shut down across the world.
Tuesday 24th March 2020
Open-access content

Latest from 10

New Northern Powerhouse partners announced

Dozens of leading businesses have signed up to the new government scheme today, taking the total number of Northern Powerhouse partners up to 31.
Monday 31st October 2016
Open-access content

Potential £90m saving for home insurance customers

The average person could save £66 by switching home insurance provider, collectively missing out on £90m worth of better deals according to research by comparethemarket.com.
Monday 31st October 2016
Open-access content

London Living Wage rises 3.7%

Mayor of London Sadiq Khan announced today that the new London Living Wage has increased from £9.40 to £9.75 an hour to reflect the higher cost of living.
Monday 31st October 2016
Open-access content
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Leading Insurer/Asset Manager – Pricing Actuary (Mortgages)

London (Greater)
Competitive
Reference
148750

Senior Consultant - Risk Settlement - Any UK Location - Up to £100,000 plus bonus

London / Manchester / Edinburgh / Remote
Up to £100,000 + Bonus
Reference
148832

Finance Transformation Actuarial student/Qualified Actuary

London (Central)
£50,000 - £75,000 depending on experience
Reference
148830
See all jobs »
 
 
 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ