Investment - Articles - PwC comment on annuity rules extended to existing pensioners


Jonathan Howe, UK Insurance Leader at PwC, commented: “From a consumer perspective, the proposals are exciting and, if buy-back is used wisely, it will be an important tool to ensure pensioners end up with the right combination of pension assets post-retirement. This announcement was the obvious next step in the pensions freedom agenda.

 “Dealing with buyers regret should be welcomed. However, it is clear that there remains a place for annuities in securing at least a minimum standard of living in retirement, and the challenge for advisors, insurers and government alike will be to get this message across alongside the new proposals. 
  
 “Of course one key question is whether the pricing will be attractive to customers – once they have seen the prices they are offered will they want to sell? Although cashing-in may be attractive to many in principle it remains to be seen if this market can deliver the value pensioners are looking for.
  
 “The Budget speech on Wednesday should shed further light on how this new group of individuals will be informed about their choices. Following the reforms announced last year there are already concerns about the advice gap, the untested PensionWise service and the FCA’s new second line of defence requirements for pension providers. This new announcement will ramp up demand for the already stretched guidance/ advice services and underlines the question – will individuals have enough information to make good decisions?
  
 “With the UK pension industry moving in to uncharted territory, we expect a number of insurers will be keen to explore the annuity buy-out market and, indeed, a number have already expressed an interest. However, it will take time for companies to develop their business model and ability to offer competitive pricing before a thriving second hand annuity market develops.”

Back to Index


Similar News to this Story

Inheritance Tax raises almost GBP6 billion in 8 months
December’s update from HMRC shows that Inheritance Tax (IHT) receipts reached £5.7 billion through the first two-thirds of this financial year (April
PIC completes first Mosaic buyin with GCB Pension Fund
Pension Insurance Corporation plc (“PIC”) has concluded its first full scheme buy-in within Mosaic, PIC’s streamlined service for pension schemes with
Airways Pension Scheme complete longevity hedge with MetLife
The Trustees of the Airways Pension Scheme (“the Scheme”), Metropolitan Tower Life Insurance Company, a subsidiary of MetLife, Inc., (“MetLife”) and Z

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.