Annuity move builds on pension freedoms, but protection for consumers will be crucial
Responding to the Treasury’s announcement that pensioners will be able to cash in their annuities for a lump sum payment from April 2017, Yvonne Braun, Director of Long-term Savings Policy at the Association of British Insurers (ABI), said:
"Providers support greater flexibility and choice for customers when it comes to their retirement funds and these proposals build on the pension freedoms which companies have worked hard to make a success. However, as the Ministers have pointed out, for most people sticking with an annuity will be the right thing, and selling one should not be done rashly.
“It’s therefore essential we see PensionWise guidance made available to cover this future market, and we support the extension of the requirement that customers get financial advice when the value of their annuity is above a certain level. Getting the framework absolutely right to provide protection to consumers will be crucial if we are not to store up significant problems for the future, and providers and the ABI will continue to work hard with the FCA and Government to achieve this."